In re Mekorot Development & Enterprise Ltd (GST AAR Maharashtra)
As per Section 23 (1) (a) of the Central Goods and Services Tax Act, 2017, any person engaged exclusively in the supplying of goods or services or both that are not liable to tax or wholly exempt from tax under this act or under the IGST Act, 2017 is not liable for registration.
Thus the applicant would be liable to obtain GST registration only if it supplies taxable good or services or both, in view of Section 22(1) mentioned above and in view of Section 23 (1) (a), no registration is required to be obtained by the applicant when it exclusively supplies goods or services or both that arc not liable to tax or wholly exempt from tax under the CGST Act, 2017 or under the IGST Act, 2017.
The applicant has submitted that it may not be mandated to take GST registration based on the contract with MJP, since the services rendered are Exempt service.
We agree with the applicant that it is not mandated to take GST registration based on the contract with MJP, since the services rendered are Exempt service. However, there is nothing forthcoming in the application made by the applicant that they are only rendering services to MJP, under the impugned contract, which has been held to be exempt under the provisions of Notification 12/2017 mentioned above and not supplying any other taxable goods or services or both. However, other than the exempt services supplied under the impugned contract with MJP, if the applicant is engaged in supply of any taxable supply of goods or services or both, then the provisions of Section 22 of the CGST Act would come into play and it would be liable to obtain registration on attaining/crossing the threshold limit mentioned under Section 22 of the CGST Act, 2017.
FULL TEXT OF THE ORDER OF AUTHORITY OF ADVANCE RULING, MAHARASHTRA
The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act” respectively ] by M/s. Mekorot Development & Enterprise Ltd , the applicant, seeking an advance ruling in respect of the following questions.-
1. Whether MJP can he considered as ‘government entity’ under GST law?
2. Whether the work intended to he carried out hy MDE qualifies for exemption as per notification No. 12/2017- Central Tax Rate (Rate) dated 28.06.2017?
3. If it is concluded from the above that the supplies made or proposed to he made by MDE to MJP qualifies for exemption then the consequent question is whether MDE requires to obtain registration under GST law?
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression ‘GST Act’ would mean CGST Act and MGST Act.
2. FACTS AND CONTENTION – AS PER THE APPLICANT
The submissions made by the applicant are as under:-
1.1. Maharashtra Jeevan Pradhikaran (hereinafter referred as MJP) has appointed Mekorot Development & Enterprise Ltd, the applicant (MDE) as a consultant for study, survey, drafting and formation of Water Supply Master Plan (WSMP) to address the water drought problem in the Marathwada region and assist the Government of Maharashtra (GOM) to make a comprehensive strategy to solve the Marathwada (Aurangabad division) Water Crisis permanently.
1.2. MDE is a fully owned subsidiary of Mekorot, the national water company of Israel which is fully owned by the Government of Israel.
1.3. MJP is a Government of Maharashtra undertaking established through The Maharashtra Jeevan Authority Act, 1976. MJP was constituted in 1977 under The Maharashtra Water Supply and Sewerage Board Act, 1976 (MWSSB Act), for rapid development and proper regulation of Water Supply and Sewerage service in the State of Maharashtra. The act was later changed to The Maharashtra Jeevan Authority Act. 1976. MJP being a GOM undertaking, the Maharashtra state government holds 100% controlling power in MJP.
2. Scope of service under the agreement between MDE and MJP
2.1. As agreed between both the parties (MJP and MDE); MDE will prepare a Water Supply Master Plan (WSMP) for averting successive droughts in the severely drought prone Marathwada region of the State. (Annex tire A – Terms of agreement)
2.2. In accordance with the agreed Scope, the consulting of MDE shall cover the following:-
