In re Food Corporation of India (GST AAR West Bangal)
The Authority for Advance Ruling, West Bengal, examined whether security services provided to the Food Corporation of India (FCI), West Bengal Region, qualify as “pure services” supplied to a Government Entity in relation to functions entrusted under Article 243G/243W of the Constitution of India, and whether such services are exempt from GST under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 , as amended.
FCI is a statutory corporation established under the Food Corporations Act, 1964, functioning under the Ministry of Consumer Affairs, Food and Public Distribution. It is entrusted with procurement, storage, movement, distribution and sale of food grains under the Public Distribution System (PDS) and other welfare schemes. To safeguard its depots and offices, FCI procured security services from a service provider. The services involved deployment of security personnel and did not include supply of goods. GST had been discharged initially under forward charge and later under reverse charge mechanism.
The applicant contended that security services are “pure services” as they do not involve supply of goods and are directly connected with discharge of PDS functions, which are covered under Serial No. 28 of the Eleventh Schedule to Article 243G of the Constitution. It was submitted that FCI qualifies as a “Government Entity” under Notification No. 12/2017 and that the exemption under Serial No. 3 of the said notification applies.
