GST
TRT-2025-
AAR Gujarat
Date:-26-04-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 26 April 2023
Facts –
- The Applicant, Ajit Babubhai Jariwala, has been granted work order to provide architectural consultancy service to Surat Municipal Corporation (SMC) regarding the project namely SMIMER Hospital & College Campus & further to prepare architectural and working drawings as required for the construction of the project.
- It is the applicant's averment that SMC, the recipient of the service, has contended that SMIMER Hospital and College is covered under the 12th Schedule of Article 243W of the Constitution of India & is thus exempt, in terms of entry no. 3 of notification No. 12/2017-Central (Rate), it being a pure service. However, the applicant states that according to them, their services would be covered under entry no. 21 of notification No. 11/2017-Central Tax (Rate) & is liable to GST @ 18%.
- The applicant's next contention is that if the activity is exempt as contended by the SMC, then the same exemption should also be available to the sub-contractors of the said pure service.
Issue –
- Whether the work order of the applicant is covered under entry no. 21 of notification No. 11/2017-Central Tax (Rate)?
Order –
- The AAR observed that the pure services excluding works contract service or other composite supplies involving supply of any goods provided to the local authority i.e., in this case to the SMC by way of any activity in relation to a function entrusted to a Municipality under article 243 W of the Constitution of India is exempt from GST.
- Hence it was held that supply by the applicant to SMC being a pure service meets the criterion set out vide Sr. No. 3 of notification No. l2l2017-CT(Rate), dated,28.6.2017, and hence, the supply is exempt from GST.
- It was also observed that the applicant as a sub-contractor would be providing the supply to the main contractor and not to the local authority and hence would not fall within the ambit of entry no. 3 of the notification No. 12/2017-Central (Rate) dated 28.6.2017 and would be leviable to GST.
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