In re Vimos Technocrats Private Limited (GST AAR Karnataka)
Q1. Whether pure consultancy services provided to the Municipalities and Corporations are exempt from GST as per the serial number 3 of the notification 12/2017-Central tax (Rate) dated 28.06.2017?
A1. Pure consultancy services (without supply of goods) provided by the applicant to the Municipalities and Corporations (local bodies) and State Government Departments, as enumerated in the application, are exempt from GST as per the serial number 3 of the notification 12/2017-Central tax (Rate) dated 28.06.2017?
Q2. Whether pure consultancy services provided to the private individual is taxable? If, yes, what is the rate of tax and relevant notification?
A2. Pure consultancy services provided to the private individuals is taxable at 9% under CGST and 9% under SGST as per the entry No.21 of the Notification No. 11/2017 Central Tax (Rate) Dated 28/06/2017.
Q3.Whether the input tax paid on the purchase of capital goods like furniture, computer, lab equipments, drone cameras, total station, auto level instruments, etc., and on certain services can be claimed to the extent of taxable supply of services?
A3. Input tax paid on the purchase of capital goods like furniture, computer, lab equipments, drone camera, total station, auto level instruments, etc., and on certain inputs services shall be restricted to so much of the input tax as is attributable to the taxable supplies made by the applicant as per subsection 2 of section 17 of the CGST Act 2017.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING
ORDER UNDER SUB-SECTION (4) OF SECTION 98 OF CENTRAL GOODS AND
SERVICES TAX ACT, 2017 AND UNDER SUB-SECTION (4) OF SECTION 98 OF
KARNATAKA GOODS AND SERVICES TAX ACT, 2017
1. M/s Vimos Technocrats Private Limited, No. 43, 2nd Cross, Cauvery Layout, Hennur-Bengaluru Road, Bengaluru-560043 [GSTIN: 29AACCV3195N1ZM], (hereinafter referred to as “the applicant”) is a Private Limited Company registered under the KGST Act, 2017 and CGST Act, 2017 filed an application for Advance Ruling under Section 97 of the CGST Act 2017 read with Rule 104 of the CGST Rules and Section 97 of the KGST Act, 2017 read with Rule 104 of KG ST Rules 2017, in FORM GST ARA-01 and discharged the fee of Rs.5,000/- each under the CGST Act and the KGST Act.
2. The Applicant is a private limited company rendering pure consultancy services like project management consultancy services including construction, supervision, quality control, rejuvenation and development of lakes. Further applicant also involved in the preparation of detailed project report for pumping treated water, scientific landfill at Bengaluru quarries, construction of Raja Nala and Other development civil works etc. The Applicant is providing these services mainly to the Municipalities, Corporations (i.e. local bodies) and also to Government Departments and only in a few cases, a pure consultancy service is being provided to private parties.
3. The Applicant presently is rendering the following consultancy services:-
a. Providing consultancy services for the preparation of DPR for the work of sewage treatment plant of Seegehalli Lake to BBMP.
b. Preparation of DPR for the construction of Kanaka NayakanaMandira to BBMP
c. Preparation of DPR for construction of sports complex at Terrace level of PalikeSoudha in Ward No. 128 Nagarabhavi to BBMP
d. Providing the consultancy services for construction, supervision, project management and Quality Control for renovation of Auditorium near Hampinagar City Central Library building, Vijayanagara Division in Ward 133 to BBMP
e. Consultancy services for project management and quality assurance for the work of rejuvenation and development of Puttenahalli Lake in Yelahanka, Bangalore Urban District to Forest Department
f. Providing project management consultancy services to BBMP including construction, supervision and quality control for the work of Package-L7 work of,-
i. Development of Sarakki / Jaraganahalli / Puttenahalli Lake
ii. Development of Annappanakere Lake / Yelchenahalli Lake Phase-land
iii. Development of Subramanyapura Lake Phase-1
g. Preparation of DPR for pumping treated water from Jakkur Lake to Thirumenahalli Lake and Kogilu Lake in Byatarayanapura Assembly Constituency to BBMP
h. Preparation of detailed project report for scientific landfill at Bengaluru Quarry, at Survey No. 176 and 271, to BBMP and
i. Project management consultancy service for preparation of DPR for Construction of Raja Nala and Other Development Civil Works in Sindhanur Municipal Limit.
4. In this background, the applicant had sought Advance Ruling on,-
i. Whether pure consultancy services provided to the Municipalities and Corporations are exempt from GST as per the serial number 3 of the notification 12/2017-Central tax (Rate) dated 28.06.2017?
ii. Whether pure consultancy services provided to the private individuals is taxable? If yes, what is the rate of tax and relevant notification?
iii. Whether the input tax paid on the purchase of capital goods like furniture, computer, lab equipments, drone cameras, total station, auto level instruments, etc., and on certain services can be claimed to the extent of taxable supply of services?
THE APPLICANT’S INTERPRETATION OF LAW
5. The applicant submitted that the works undertaken by him are classified as “pure services” falling under serial number 3 of notification 12/2017-Central tax (Rate) dated 28.06.2017?, issued under the CGST Act, 2017, and a similar notification issued under the KGST Act, 2017. The entry 3 of the notification referred to above reads as under:-
“3. Chapter 99 – Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority 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”
6. From the above, the applicant submitted that any type of ‘pure services’ provided to Central Government or State Government or to a local authority in relation to any function entrusted to a Municipality under Article 243W of the Constitution is exempt from payment of tax. The applicant further submitted that the works undertaken by the applicant is neither works contract service nor composite supply involving any goods. The applicant is involved in the supply of ‘pure services’ only to the Corporations, Municipalities and Government Department falling under Article 243W read with Twelfth Schedule of the Constitution and falls under serial number 3 of the Notification referred to above and hence exempt from payment of GST.
PERSONAL HEARING
7. Sri Y.C. Shivakumar, Advocate and Duly Authorized Representative of the applicant company,appeared for personal hearing proceedings before this authority and reiterated the submissions as narrated above.
8. Subsequent to the personal hearing, the applicant has made the additional submission on 30.07.2020 and narrated how activities undertaken by him arerelated to the entry in Twelfth Schedule of the Constitution of India. The details are as under:
