In re MSV International Inc. (GST AAR Haryana)
Q1. Whether the services by way of Independent Consultancy Services provided or to be provided by the Applicant to Public Works Department, Gurgaon as per Request for Proposal (RFP) at Annexure-1 for Design, Engineering, Finance, Construction, Operation and Maintenance of Gurgaon- Faridabad and Ballabhgarh-Sohna Roads on BOT basis are activity in relation to function entrusted to Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India?
Ans. The services by way of Independent Consultancy Services provided or to be provided by the Applicant to Public Works Department, Gurgaon as per Request for Proposal (RFP) at for Design, Engineering, Finance, Construction, Operation and Maintenance of Gurgaon- Faridabad and Ballabhgarh- Sohna Roads on BOT basis are not an activity in relation to function entrusted to Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India.
Q2. Whether the services by way of Independent Consultancy Services provided or to be provided by the Applicant to Public Works Department, Gurgaon as per Request for Proposal (RFP) at Annexure-1 are Pure Services qualifying for exemption from levy of CGST and SGST, as notified in serial number 3 of Notification No. 12 of 2017- Central Tax (Rate) dated 28.06.2017 issued under Central Goods and Services Tax Act, 2017 (CGST Act, 2017) and corresponding notifications issued under Haryana Goods and Services Tax Act, 2017 (HGST Act, 2017)?
Ans. The services offered/ provided by the applicant are pure services within the definition of 2(zfp) but are not exempted from levy of tax under CGST/ HGST Act.
Q3. If the answer to Question No. (ii) above is negative, whether, the Applicant is within its rights under the CGST and HGST Acts for charging GST to the Service Recipient on the service value for the services provided as per RFP (Annexure 1)?
Ans. The applicant is within its right and legally bound to charge tax under CGST/ HGST Act, 2017.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, HARYANA
Brief facts:
1.1 The Applicant is a foreign company engaged in providing independent engineering consultancy services which includes preparation of detailed project report, city development plans, designs and drawings and supervision thereof, for projects in different parts of the country for construction of Roads and Bridges, Solid Waste Management, Water Supply and Sanitation, Urban Development, Buildings and Environment. The company is registered at Gurgaon holding GSTIN 06AADCM1304M1ZP. The Applicant has approached the Authority for Advance Ruling seeking a ruling on the following issues:
(i) Whether the services by way of Independent Consultancy Services provided or to be provided by the Applicant to Public Works Department, Gurgaon as per Request for Proposal (REP) (submitted with this Authority) for design, Engineering, Finance, Construction, Operation and Maintenance of Gurgaon- Faridabad and Ballabhgarh-Sohna Roads on BOT basis are activity in relation to function entrusted to Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India?
(ii) Whether the services by way of Independent Consultancy Services provided or to be provided by the Applicant to Public Works Department, Gurgaon as per Request for Proposal (RFP) are Pure Services qualifying for exemption from levy of CGST and SGST, as notified in serial number 3 of Notification No. 12 of 2017- Central Tax (Rate) dated 28.06.2017 issued under Central Goods and Services Tax Act, 2017 (CGST Act, 2017) and corresponding notifications issued under Haryana Goods and Services Tax Act, 2017 (HGST Act, 2017)?
(iii) If the answer to Question No. (ii) above is negative, whether, the Applicant is within its rights under the CGST and HGST Acts for charging GST to the Service Recipient on the service value for the services provided as per RFP (Annexure 1)?
2. Applicant’s submission:
2.1 The Applicant is a foreign company engaged in providing independent engineering consultancy services which includes preparation of detailed project report, city development plans, designs and drawings and supervision thereof, for projects in different parts of the country for construction of Roads and Bridges, Solid Waste Management, Water Supply and Sanitation, Urban Development, Buildings and Environment.
2.2 In order to provide the above services, the company submits its expression of interest in response to requests for proposal (RFP) containing description of work.
2.3 The Public Works Department (Executive Engineer, Provincial Division No. I, PWD B&R Br)., Gurugram, has invited expression of interest for Independent Consultancy Services For Operation & Maintenance Supervision with Construction Supervision of Balance Work of Project named Design, Engineering, Finance, Construction, Operation and Maintenance of Gurgaon- Faridabad and Ballabhgarh-Sohna Roads on BOT basis. The role and functions of the Applicant, as per the RFP, shall include the following:
(i) Review, inspection and monitoring of Construction of balance Works with Operation and Maintenance (O&M) supervision:
(ii) Conducting Tests on completion of construction of balance work and issuing Completion certificate;
(iii) Review, inspection and monitoring of O&M;
(iv) Review, inspection and monitoring of Divestment Requirements;
(v) Determining, as required under the Agreement, the costs of any works or services and/or their reasonableness;
(vi) Determining, as required under the Agreement, the period or any extension thereof, for performing any duty or obligation;
(vii) Assisting the Parties in resolution of disputes as set forth in Paragraph 9 and undertaking all other duties and functions in accordance with the Agreement.
3. Applicant’s Interpretation of law and facts:
3.1 Notification No. 12 of 2017- Central Tax (Rate) dated 28.06.2017 of the Government of India has been issued under Section 11 of CGST Act exempting the notified services from levy of GST. Entry SI. No. 3 of the said Notification which is reproduced below exempts “pure services” provided to Central Government or any State Government or any Union territory or any local authority or a Governmental Authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution.
Entry SI.No.3 of Notification No. 12 of 2017- Central Tax (Rate) dated 28.06.2017 is as under:
