In re Nirma University (GST AAAR Gujarat)
In the Notification No. 12/2017-Central Tax, Sr. No. 4 provides exemption to services by governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243W of the Constitution. Similar services provided by Central Government, State Government, Union Territory or local authority were also covered under the said Sr. No. 4 till 26.07.2018, prior to amendment vide Notification No. 14/2018-Central Tax (Rate). However, admittedly, the appellant does not fall under any of those categories. As it has already been held that the appellant is not a ‘governmental authority’, we hold that the exemption provided vide Sr. No. 4 of Notification No. 12/2017-Central Tax (Rate) is not admissible to the appellant.
Further, Sr. No. 45 of the Notification No. 12/2017-Central Tax provides exemption to services provided by an arbitral tribunal, a Partnership Firm of Advocates, an individual as an advocate or a Senior advocate, by way of legal services to Central Government, State Government, Union Territory, local authority, Governmental Authority or Government entity. Again, the appellant admittedly does not fall under any of the categories of Central Government, State Government, Union Territory or local authority. We have already held that the appellant is not a “Governmental Authority”. The appellant has not claimed it to be “Government entity”. The definition of “Government entity” at clause (zfa) of Notification No. 12/2017-Central Tax also provides condition of 90 per cent or more participation by way of equity or control, which the appellant does not satisfy. Therefore, we hold that the exemption provided vide Sr. No. 45 of Notification No. 12/2017-Central Tax (Rate) is not admissible to the appellant.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, GUJARAT
M/s. Nirma University (herein after referred to as the “appellant” or “Nirma”) filed an application for advance ruling before the Gujarat Authority for Advance Ruling (herein after referred to as the ‘GAAR’) wherein it raised the following questions for advance ruling :-
(i) Whether Nirma would be eligible for claiming benefit of the exemption for legal service as provided in Sr.No. 45 of the Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017, as amended from time to time in respect of procurement of legal services?
(ii) Whether services provided by Nirma are exempted under Sr.No.4 of Notification No. 12/2017- Central Tax (Rate)?
(iii) Whether Nirma is required to be registered as a Deductor under GST as per the provision of Section 24 of the CGST Act?
2. One of the aspects required to be determined in order to arrive at the decisionon aforesaid three questions was whether the appellant is a “governmental authority” or otherwise. The GAAR examined the issue and held that the appellant does not fall under the definition of “governmental authority”. Accordingly, the GAAR, vide Advance Ruling No. GUJ/GAAR/R/38/2020 dated 03.07.2020, answered in negative in respect of all the aforesaid three questions.
3. Aggrieved by the aforesaid advance ruling to the extent of denial of exemption under Sr. No. 45 and Sr. No. 4 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 as amended from time to time and corresponding Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 as amended from time to time (the Central Tax (Rate) Notification herein after referred to includes the reference to corresponding State Tax (Rate) Notification also), the appellant has filed the present appeal. Thus, the appellant has not challenged the advance ruling in respect of question number 3 raised by it.
4.1 The appellant has referred to the definition of “governmental authority” given under section 2(16) of the Integrated Goods and Services Tax Act, 2017 (herein after referred to as the “IGST Act, 2017”) and has submitted that since it has been set up by an Act of a State Legislature, it is a “government authority”. It has further submitted that since item (i) of the said definition is separated from item (ii) by a semi colon (;), the condition prescribed below said item (ii) is not applicable to item (i). The appellant has relied upon the judgement in the case of Rajinder Singh V/s Kultar Singh of the Hon’ble High Court of Panjab and Haryana [AIR 1980 P&H 1: ILR (1979) 2 P&H 486(FB)] and the judgement in the case of Shapoorji Paloonji& Company Ltd. V/s CCE, Patna [2016-TIOL-556-HC-PATNA-ST]
4.2 The appellant has also referred to entry 13 of the Twelfth Schedule read with Article 243W of the Constitution of India. The said entry 13 covers “promotion of cultural, educational and aesthetic aspects”. The appellant has submitted that the educational activities is very well covered in the said entry and there is no distinction provided for primary or higher education; that the entry is vast enough to cover all types of education and allied activities pertaining to cause of education. The appellant has relied upon the judgements in the case of State Waqf Board V/s Abdul Azeer Sahib [AIR 1968 Mad 79] and Doypack Systems (P) Ltd V/s UOI [1988(36) E.T.T.201(S.C.)].
FINDINGS :-
5. We have considered the submissions made by the appellant in the appeal filed by them, in the additional written submissions as well as submissions at the time of personal hearing, Ruling given by the GAAR and other evidences available on record.
6.1 As the issue involved in this case is regarding admissibility or otherwise of benefit of Sr. No. 45 and Sr. No. 4 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, it would be useful to refer to those entries, which read as follows :-
