In re Anandjiwala Technical Consultancy (GST AAR Gujarat)
Q. Whether the Rajkot Urban Development Authority (RUDA) (Accredited Department of Gujarat State Government) falls under the definition of Government Authority or a Government entity as defined under para 2(zf) & 2(zfa) of the Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 and consequently Pure Service which the applicant is providing to them is exempt from tax or not by virtue of Notification No.12/2017?
We find that the applicant has devoted a major part of his submissions trying to prove or to establish that the Rajkot Urban Development Authority is covered under the definitions of Governmental Authority or Government Entity. We find that they have also referred to the Gujarat Town Planning & Urban Development Act, 1976, Question no.25 of FAQ on Government Services under Sectoral Series released by CBEC, list of the functions entrusted to a municipality under Article 243 W of the Constitution of India etc. However, they have hardly devoted any space in their submission to prove the fact that the services supplied by them to the Rajkot Urban Development Authority are pure. They have not even submitted the copy of the agreement made by them with the Rajkot Urban Development Authority with respect to the aforementioned service supplied by them. Here, we would like to emphasise that the primary condition for an applicant to be eligible for the exemption by virtue of Entry No.3 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time) is that the services supplied by them are pure i.e. services supplied/provided without any supply of goods and excluding Works Contract service or other composite supplies involving supply of any goods, and only if it is proved or established that the services provided by them are pure, will the applicability of the other conditions i.e. whether the recipient of the services is a Governmental Authority or Government Entity, whether the services supplied are in relation to functions entrusted to a municipality or a panchayat under Articles 243G or 243W of the Constitution etc. will be looked into. However, under the above circumstances, it would not be possible for us to decide whether the services supplied by the applicant are pure or otherwise merely on the basis of the letter of acceptance submitted by them. Further, in absence of the aforementioned agreement, and without going through the terms and conditions of the agreement, it would not be possible for us to decide whether the Services provided by the applicant are Pure or are a supply of services along with supply of goods since the work is connected to the project of Affordable Housing and could also involve Works Contract service. In view of the facts mentioned above, we are of the opinion that in absence of the relevant documents, we cannot take a decision in this regard. We find that the applicant has devoted a major part of his submissions trying to prove or to establish that the Rajkot Urban Development Authority is covered under the definitions of Governmental Authority or Government Entity. We find that they have also referred to the Gujarat Town Planning & Urban Development Act, 1976, Question no.25 of FAQ on Government Services under Sectoral Series released by CBEC, list of the functions entrusted to a municipality under Article 243 W of the Constitution of India etc. However, they have hardly devoted any space in their submission to prove the fact that the services supplied by them to the Rajkot Urban Development Authority are pure. They have not even submitted the copy of the agreement made by them with the Rajkot Urban Development Authority with respect to the aforementioned service supplied by them. Here, we would like to emphasise that the primary condition for an applicant to be eligible for the exemption by virtue of Entry No.3 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time) is that the services supplied by them are pure i.e. services supplied/provided without any supply of goods and excluding Works Contract service or other composite supplies involving supply of any goods, and only if it is proved or established that the services provided by them are pure, will the applicability of the other conditions i.e. whether the recipient of the services is a Governmental Authority or Government Entity, whether the services supplied are in relation to functions entrusted to a municipality or a panchayat under Articles 243G or 243W of the Constitution etc. will be looked into. However, under the above circumstances, it would not be possible for us to decide whether the services supplied by the applicant are pure or otherwise merely on the basis of the letter of acceptance submitted by them. Further, in absence of the aforementioned agreement, and without going through the terms and conditions of the agreement, it would not be possible for us to decide whether the Services provided by the applicant are Pure or are a supply of services along with supply of goods since the work is connected to the project of Affordable Housing and could also involve Works Contract service. In view of the facts mentioned above, we are of the opinion that in absence of the relevant documents, we cannot take a decision in this regard.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT
BRIEF FACTS
The applicant M/s. Anandjiwala Technical Consultancy located at 9, Shivranjani Co-operative Housing Society, Shivranjani Cross road, Satellite, Ahmedabad-380015, Gujarat are engaged in providing Professional and Technical service. The applicant has stated that they have been allotted work of providing Project Management Consultancy Service(Heading 998339) in Relation to PM Awas Yojana by Rajkot Urban Development Authority and the service is Pure service; that Serial No.3 of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017, as amended from time to time exempts the 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 (or a Government Entity) 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.
2. The applicant has submitted that the Governmental Authority as per Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 (as amended) is as under:
“(zf) “Governmental Authority” means an authority or a board or any other body, –
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by any Government, with 90 per cent. or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution.
(zfa) “Government Entity” means an authority or a board or any other body including a society, trust, corporation,
(i) set up by an Act of Parliament or State Legislature; or
(ii) established by any Government, with 90per cent. or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority.”
3. The applicant has submitted that the Rajkot Urban Development Authority (RUDA) is constituted under Section 22 of the Gujarat Town Planning and Urban Development Act, 1976 on 30th January, 1978 with three mission slogans:
1. A better quality of life for all.
2. Integrated Development Planning Approach and
3. Current Reality.
3.1 The applicant has further stated that Section 22 of the Gujarat Town Planning and Urban Development Act, 1976 empowers the State Government to declare Urban Development Area and Authority for the work entrusted to it; that sub-clause (4) of Section 22 of the Gujarat Town Planning and Urban Development Act, 1976 specifically mentions the manner of appointment of members of the Development Authority; that Section 23 of the Gujarat Town Planning and Urban Development Act, 1976 defines the Powers and Functions of Urban Development Authority and Power and Control of RUDA is directly under the control of the State Government. The applicant has placed reliance on the following advance rulings given by different authorities which are directly applicable to the instant case and thus one may draw conclusive evidence and has submitted copies of the same:
(a) Gujarat Authority for Advance Ruling vide order GUJ/GAAR/R/08/2019 dated 01.05.2019.
(b) Rajasthan Authority for Advance Ruling vide Order No.RAJ/AAR/2018-19/13 dated 25.08.2018.
(c) Madhya Pradesh Authority for Advance Ruling vide Order No.02/2018 dated 22.06.2018.
4. The applicant has put forward the following question seeking Advance Ruling on the same:
“Whether the Rajkot Urban Development Authority (Accredited Department of Gujarat State Government) falls under the definition of Government Authority or a Government entity as defined under para 2(zf) & 2(zfa) of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017?”
5. The applicant has provided additional submission vide letter dated 15.08.2020 which was received vide email on 20.08.2020. The applicant has stated that they are a firm engaged in providing Professional & Technical Consultancy Service particularly in relation to Civil Construction Service and they are providing only services without goods involved in it; that they have been hired by Rajkot Urban Development Authority (RUDA) for the work of Project Management consultant for preparing Estimates, Tenders, Evaluation of Tenders, consulting and supervision work of Affordable Housing (EWS-II Type) Project at Munjka RUDA Area and have submitted a copy of the Letter of Acceptance (LOA) issued by RUDA to them for the said work. They have submitted their point of view with regard to the aforementioned service supplied by them as under:
(1) Contract for the service awarded involves supply of Service only; without involving supply of goods meaning thereby the service that they are providing to RUDA for the above work is Pure Service.
