In re Vidarbha Infotech Private Limited (GST AAR Maharashtra)
Question 1:-Whether the contract from Nagpur Environmental Services Ltd (NESL) Nagpur (a 100% subsidiary of the Nagpur Municipal Corporation, Nagpur) for providing services for the management of Non-Network Tanker with the help of GPRS system at Nagpur would be exempt from GST since it falls under the various exempt services in the article 243 W of the constitution of India as well as services rendered to a local authority,
Answer: Answered in the affirmative.
FULL TEXT OF 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 Ace] by VIDARBHA INFOTECH PRIVATE LIMITED, the applicant, seeking an advance ruling in respect of the following question.
1. Whether the contract from Nagpur Environmental Services Ltd (NESL) Nagpur (a 100% subsidiary of the Nagpur Municipal Corporation, Nagpur) for providing services for the management of Non-Network Tanker with the help of GPRS system at Nagpur would be exempt from GST since it falls under the various exempt services in the article 243 W of the constitution of India as well as services rendered to a local authority,
2. 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, henceforth for the purposes of this Advance Ruling, a reference to “GST Act” would means CGST / MGST Act.
3A. FACTS AND CONTENTION — AS PER THE APPLICANT
1. The submissions, as reproduced verbatim, could be seen thus-
1. That M/s Vidarbha Infotech Pvt Ltd a company set up under the Companies Act, 1956 was carrying on the business (hereinafter referred to as the contractor) comprising of dealership in computer hardware, software and peripherals and in the service sector segment covering the construction of IT Park, towing van activity.
2. That the contractor was awarded a contract from Nagpur Environmental Services Ltd. (NESL). Nagpur (a 100% subsidiary of the Nagpur. Municipal Corporation, Nagpur for providing services for the management of Non-Network Tanker with the help of GPRS system at Nagpur and is currently providing the same that NESL a SPV was specially set up by NMC for providing such types of services.
3. That the company had the necessary infrastructure for carrying out the said services within the city of Nagpur. That this service is basically to provide water supply for domestic, industrial and commercial purposes at various locations in and around Nagpur city. That this work was allotted in pursuance of a work order dated 31/7/2018 to the company. That for this contract, the contractor was raising the bills on the NESL and was charging GST @ 18% in each bill.
4. That, the services rendered by the contractor fall under one of the services i.e. clause the: (e) Water supply for domestic, industrial and commercial purposes, of article 243 W of the constitution which was actually rendered to Nagpur Municipal Corporation through NESL That the NESL is 100% subsidy of Nagpur Municipal Corporation.
5. From the above facts, it is clear that the applicant is providing services to the local authority as defined in section 2(69) of the MGST Act and the same is reproduced as under: Local authority” means.
(a) a “Panchayat” as defined in clause (d) of article 243 of the Constitution;
(b) a “Municipality” as defined in clause (e) of article 243P of the Constitution;
(c) a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or. management of a municipal or local fund;
(d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006;
(e) a Regional Council or a District Council constituted under the Sixth Schedule to the Constitution;
(f) a Development Board constituted under article 371 (and article 3713j$1 of the Constitution; or (g) a Regional Council constituted under article 371A of the Constitution;
As it is pure service rendered /provided to a local authority (excluding works contract since or other composite supplies involving supply of any goods) by way of any activity in or in relation to any function entrusted to a municipality under article 243 W of the Constitution of India:
6. For ready reference entry no. 3. of exemption notification no. 12/2007 -Central Tax (rate) is reproduced below as under:
TO BE PUBLISHED IN THE GAZZETE OF INDIA. EXTRAORDINARY. PART II SECTION 3, SUB-SECTION (11 Government of India Ministry of Finance (Department of Revenue) Notification No. 12/2017- Central Tax (Rate) :New Delhi, the 28th June, 2017
G.S.R ………..(B).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do; on the recommendations of the Council, hereby exempts the intra-State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub-section (1) of section 9 of the said Act, as is in excess of the said tax calculated at the rate as specified in the corresponding entry in column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column (5) of the said Table, namely:
