Case Law Details
in re BCITS Pvt Ltd (GST AAR Haryana)
BCITS Pvt Ltd (GST AAR Haryana) provides taxable services, including water billing software and database maintenance, to Municipal Corporation Gurugram.
It is observed that in the present matter the water distribution system is under the control of Municipal Corporation, Gurugram. The function of water supply to the public at large has been entrusted to MCG by the Government of Haryana. In the notification no. 12/2017 CT (Rate) dated 28.06.2017 nil rate of tax is applicable on pure services provided to the Local Authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution of India. The functions are listed in the 12th Schedule of the Constitution (Under Article 243 W). In the present matter, MCG has further sought services related to activities of design and development electronic billing and distribution of the bills and collection system for water supply and sewerage bills from the applicant. These services includes spot billing i.e. taking reading, generation and delivery of the bills to the end consumers and AMC of the software to the applicant i.e. M/s BCITS Pvt. Ltd. The manpower is also provided by the applicant for the said activity.
The nature of services rendered by the applicant is like a software tool operated by its staff. The said services include creation and maintenance of data base of the consumers and the web based spot billing and collection of payments on behalf of Municipal Corporation. These services cannot be termed as pure services as defined under the provisions of the GST Act, 2017. So, these are not covered in the clause 5 of 12th Schedule i.e. water supply for domestic, industrial and commercial purposes. This function of water supply has been entrusted to a Municipality under Article 243W of the Constitution of India and these services provided by the applicant to the MCG are not in relation to the water distribution system per se.
Water supply system necessarily requires procurement, transmission and supply of water to the consumers and meter installation but these functions are being done by the MCG. Whereas the applicant has provided the software services along with manpower to the MCG for the support of water distribution services. It enhances the effectiveness of the services provided by the MCG to the consumers (public at large).
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