In Re : Egis India Consulting Engineers P. Ltd.
GST
2018 (8) TMI 283 – AUTHORITY FOR ADVANCE RULINGS, MADHYA PRADESH – 2018 (16) G. S. T. L. 171 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, MADHYA PRADESH – AAR
Dated:- 22-6-2018
Case No. 8/2018
GST
Shri Rajeev Agrawal, Joint Commissioner, And Commissioner CGST And Central Excies And Shri Manoj Kumar Choubey, Joint Commissioner of State Tax, Commircial Tax Division
For The Applicant : Ravindra Singh Jadon
RULING
1. BRIEF FACTS OF THE CASE:
1.1 M/s. Egis India Consulting Engineers P. Ltd., Shajapur (hereinafter referred to as the Applicants) have been engaged in providing Consulting services to their clients and they have been registered with GSTN under GSTIN 23AACCB6390F1ZW.
1.2 The Applicant is engaged in providing engineering, project structuring and operations services in various sectors like transport, urban development, building, industry, water, environment and energy. The Ministry of Urban Developme
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is as under:
– Review of HFPoA and Details Project Report
– Bid Process Management
– Project and Contract Management
– Supervision and Quality Control
1.5 On perusal of the aforesaid terms of the both the contracts of AMRUT as well as PMAY, the following understanding appears, as contended by the applicants:
(i) For the purpose of executing the Contracts, the Applicant would provide consulting services to the Recipient in respect of survey and investigations, feasibility study, bid process management, contract management and supervision etc., by deploying its personnel conforming to the requirement of the RFP documents for both Schemes. Such personnel would be required to travel and visit the Project site.
(ii) Further, the Applicant procures certain goods which are required for rendering the above services of survey, investigation etc. Such goods include laptop, desktop etc., which are procured by Applicant on behalf of Recipient, which are later on reimbursed on actual c
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respective contracts have been awarded to the applicants, the applicants have approached the Authority seeking answers to the questions referred hereunder;
2. QUESTIONS RAISED BEFORE THE AUTHORITY:
The below question have been formed in relation to the services being provided by applicant to the recipient (State/ULBs) vide reference to the contracts:
2.1 Whether the Project Development and Management Consultancy services ('PDMC') provided by Applicant to recipient under the Contract for AMRUT; and the Project Management Consultancy services ('PMC') under the Contract for PMAY would qualify as an activity in relation to function entrusted to Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India?
2.2 If answer to question 2.1 is in affirmative, would such services provided by the Applicant qualify as “Pure services (excluding works contract service or other composite supplies involving supply of any goods)” as provided in serial numb
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ingly, the documents submitted have been taken on record for consideration.
5. DISCUSSIONS AND FINDINGS:
5.1 We have carefully considered the submissions made by the applicant in the application and also the documents submitted at the time of personal hearing. In view of above deliberations and on considering the various clauses of agreement between Directorate, Urban Administration & Development, Government of Madhya Pradesh, Bhopal, and the applicant M/s. Egis India Consulting Engineers Pvt. Ltd., Shajapur, Madhya Pradesh “^\ for “Project Development and Management Consultant (PDMC) for Atal Mission for Rejuvenation and Urban Transformation (AMRUT) including Project Management of other Notified Schemes in Project Area and the Project Management Consultancy Services (PMC) under the Contract for PMAY”, we proceed to examine the questions applied for by the applicant.
5.2 Coming to the first question; 'Whether the Project Development and Management Consultancy services (PDMC) provide
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(iii) reduce pollution by switching to public transport or constructing facilities for non-motorized transport e.g. walking and cycling. The major components of the AMRUT Scheme are Water Supply system, Sewerage, Septage, Storm Water Drainage, Urban Transport, Green Space and Parks, Reforms management and support, Capacity building, etc.
5.4 Similarly, as per website of Pradhan Mantri Awas Yojana-Housing for All (Urban), Ministry of Housing and Urban Affairs, the PMAY is a Scheme to provide central assistance to Urban Local Bodies (ULBs) and other implementing agencies through States/UTs for Rehabilitation of existing slum dwellers using their land as a resource through private participation, and Affordable Housing in Partnership.
5.5 Thus, the various objectives of both the above Schemes are covered in more than one clauses of the Eleventh and Twelfth Schedule referred in Article 243G and 243W of the Constitution, including Housing, drinking water, sanitation, Park, etc.
5.6 Accor
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o. 2/2018-Central Tax (Rate), dated 25th January, 2018 issued under Central Goods and Services Tax Act, 2017 (CGST) and corresponding notifications issued under Madhya Pradesh Goods and Services Tax Act, (MPGST Act), where the Project cost includes the cost of service rendered along with reimbursement of cost of procurement of goods for rendering such services, and, this, be eligible for exemption from levy of CGST and MPGST, respectively ?”
5.8 The Contract awarded to the applicant by Urban Administration & Development, Government of Madhya Pradesh, Bhopal, for “Project Development and Management Consultant (PDMC) for Atal Mission for Rejuvenation and Urban Transformation (AMRUT) including Project Management of other Notified Schemes in Project Area” is a Pure Service Contract. It is not covered in exclusion clause pertaining to “works contract service” or “composite supplies involving supply of any goods”. It is evidently in relation to the functions entrusted to Municipalities unde
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ent, etc. from the employer, these Equipments, Furnitures, etc. shall be property of the Employer, and shall be disposed of by the applicant as per instruction of the Employer after their use for the contract'.
5.10 Having carefully considered the nature of equipments, furnitures etc., which the applicant is required to purchase, of the like of Lap-tops, computers, refrigerators, furnitures etc., we find that these items are not naturally bundled into the service being provided by the applicant Further, we also find that as per the contracts, such items have to be disposed off by the applicant after completion of contract as directed by the principal, and the cost of such items would be over and above the contract price. Therefore, we hold that such purchases of equipments, furnitures, etc. would neither make the said contract of consultancy as a works contract, nor a composite contract, and therefore, due to purchase of Equipments, Furnitures, etc. by the applicant, and getting reimb
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anagement Consultancy services ('PDMC') provided by Applicant to recipient under the Contract for AMRUT; and the Project Management Consultancy services ('PMC') under the Contract for PMAY would qualify as an activity in relation to function entrusted to Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India.
6.2 In respect of Question No.2, we hold that such services provided by the Applicant would qualify as “Pure services (excluding works contract service or other composite supplies involving supply of any goods)” as provided in serial number 3of Notification No. 12/2017- Central Tax (Rate) dated 28 June, 2017 as amended by Notification No. 2/2018-Central Tax (Rate) dated 25 January, 2018 issued under Central Goods and Services Tax Act, 2017 ('CGST') and corresponding notifications issued under Madhya Pradesh Goods and Services Tax Act, 2017 (MPGST Act) in respect of the cost of service rendered along with reimbursement of cost of pr
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