In re Municipal Corporation Pratapgarh (GST AAR Rajasthan)
Applicant being a local authority is engaged in receipt of various kinds of services provided by different contractors on which applicability of GST and GST TDS will be -:
a. Pure Services will attract Nil rate of duty and provisions of GST TDS will not be applicable.
b. In Composite supply of goods and services where supply of goods is not more than 25% of the total value of supply, will attract Nil rate of duty and provisions of GST TDS will not be applicable.
c. In Composite supply of goods and services where supply of goods is more than 25% of the total value of supply, will attracts GST @ 12% (SGST 6% +CGST6%) if the activity fall under purview of Serial No. 3 of Notification 11/2017 (CT-rate) dated 28.06.2017 as amended from time to time and if not, then GST @ 18% (SGST 9% +CGST 9%) will be applicable. Provisions of GST TDS will apply as the activity in this case is taxable.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING RAJASTHAN
Note: Under Section 100 of the CGST/ RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/ RGST Act, 2017, within a period of 30 days from the date of service of this order.
The issue raised by Municipal Corporation Pratapgarh, situated at Nagar Parishad office, Near Bus Stand, District-Pratapgarh, Rajasthan 312605, (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2)(a),(e) and (g), given as under :
a. classification of goods and/or services or both;
e. determination of the liability to pay tax on any goods or services or both;
g. whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.
Further, the applicant being a registered person (GSTIN is 08AAALM1891K1DY, as per the declaration given by him in Form ARA-01) the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. _Ba§ed on the above observations, the applicant is admitted to pronounce advance
1. SUBMISSION AND INTERPRETATION OF THE APPLICANT:
a. The applicant is Municipal Corporation of Pratapgarh district i.e. constituted as a local authority as mentioned in article 243W of Constitution of India.
b. The applicant is receiving various services from various contractors for cleaning of road, garden, toilets and waste collection. As most of the services received are under article 243W of Constitution of India but these services are on rate basis. The applicant is not able to clarify whether the above mentioned services received on rate basis mentioned in article 243W are taxable or exempted.
c. The applicant is registered under the provisions of the Central Goods and Services Tax Act, 2017 read with the provisions of the Rajasthan State Goods and Services Tax Act, 2017 in Division-G of CGST Udaipur Commissionerate.
2. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT
3. PERSONAL HEARING
In the matter personal hearing was granted to the applicant on 01.03.2019 at Room no. 2.29 NCRB, Statue Circle, Jaipur. Shri Pradeep Patidar and Shri Mukesh Mohil (Authorised Representative) of applicant appeared for PH. during the PH, he reiterated the submissions already made in the application. He further requested that the case may be decided at the earliest.
4. COMMENTS OF THE JURISDICTIONAL OFFICER
The jurisdiction officer (Assistant Commissioner, CGST Division-G, Plot Number 168-172, Sector-4, Gandhinagar, District-Chittorgarh 312001) has submitted his comments vide letter dated 22.02.2019 which can be summarized as, the supply of pure services to Central Government, State Government or Union territory or local authority or a Governmental Authority by 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 are chargeable to Nil rate of GST as mentioned in Notification No. 12/2017-Central Tax(Rate) dated 28.06.2017.
5. FINDINGS, ANALYSIS 8s CONCLUSION:
a. We observe that, the applicant is a local authority constituted under the provisions of Article 243W of Constitution of India. It provides various civic services directly or indirectly to citizens residing in Pratapgarh viz. cleaning of roads, gardens, toilets and waste collection etc. It at times also hires various contractors and receives the services from contractors on rate basis.
b. The services received by the applicant are not only pure services but also involves supply of goods viz. construction of toilets involves supply of manpower services along with goods like bricks, pipes etc.
c. The activities entrusted to the Municipality under Article 243W of the Constitution of India and listed under Twelfth Schedule are enumerated as under;
[Article 243-W]
1. Urban planning including town planning.
2. Regulation of land use and construction of buildings.
3. Planning for economic and social development.
4. Roads and bridges.
5. Water supply for domestic, industrial and commercial purposes.
6. Public health, sanitation conservancy and solid waste management.
7. Fire services.
8. Urban forestry, protection of the environment and promotion of ecological aspects.
9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded.
10. Slum improvement and up gradation.
11. Urban poverty alleviation.
12. Provision of urban amenities and facilities such as parks , gardens, playgrounds.
13. Promotion of cultural, educational and aesthetic aspects.
14. Burials and burial grounds; cremations, cremation grounds and electric crematoriums.
15. Cattle ponds; prevention of cruelty to animals.
16. Vital statistics including registration of births and deaths.
17. Public amenities including street lighting, parking lots, bus-stops and public conveniences.
18. Regulation of slaughter houses and tanneries.
On perusal of said Schedule it is evident that services received by the applicant viz. cleaning of road, garden, toilets and waste collection are mentioned under point number 4,10,12,13 and 17. Thus, it is easily ascertained that the applicant being a local Authority is providing services to citizens.
d. The serial no. 3 of Notification No. 12/2017 Central tax (Rate) dated 28.06.2017 emphasize on pure services received by the local authority which is reproduced as under:
