Case Law Details
In re National Institute of Technology (GST AAR Haryana)
Whether the pure services supplied to the applicant institute such as manpower supply services, security services, horticulture services, civil maintenance and electrical maintenance services etc. shall be liable to tax under GST or exempt from payment of tax vide Entry 3 of Notification 12/2017- Central Tax (rate) as amended from time to time?
The National Institute of Technology, Kurukshetra is an institute of higher education whereas, Entry No. 17 of Schedule XI, Article 243G of the Constitution of India incorporates Education, including Primary and Secondary Schools. It suggests that the term education used in this Entry includes only school education and that too imparted in Primary and Secondary Schools. Had that not been the case, the subject Technical training and vocational education would not have found mention at Entry No. 18 of Schedule XI. Whereas, NIT provides higher education and as such it cannot be said to be covered under Entry No. 17 of Schedule XI of Constitution of India.
The pure services received by the NIT includes services such as manpower supply services, security services, horticulture services, civil maintenance and electrical maintenance etc. Whereas, Entry No. 3 of exemption Notification 12/2017- Central Tax (rate) mentions “Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union erritory or Local Authority or a Governmental Authority, or a Government Entity 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.”
The higher education imparted by NIT, Kurukshetra neither falls under the subjects assigned to Panchayats under Article 243G nor does it fall under those assigned to Municipalities under Article 243W Indian Constitution. Moreover, Panchayats (Gram Panchayats, Block Panchayats and Zila Panchayats) have no connection whatsoever with these services received by NIT, Kurukshetra. Neither the tender for services are floated by Panchayats nor is the payment being made by them. The Panchayats have been created for rural areas whereas Municipalities look after urban affairs. The NIT, Kurukshetra, located within the Municipal boundaries of Kurukshetra, does not even have the remotest link with the Panchayats. In this manner, the provisions of Entry No. 3 of exemption notification does not apply in case of the applicant.
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