2018 (7) TMI 755 – AUTHORITY FOR ADVANCE RULING – ODISHA – 2018 (14) G. S. T. L. 562 (A. A. R. – GST) – Exemption towards supply of services provided to government under any training programme – Applicability of Entry 72 of Notification No.12/2017-Central Tax – supplies made by the Applicant to the Government and Government aided higher secondary schools in Odisha under the ICT Project – Whether the services provided by the Applicant to the Government and government aided higher secondary schools under the ICT Project, are covered under the scope of Entry No. 72 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017?
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Held that:- When the language of a taxing statute is clear, if the conditions of supply falls within the four corners of statute allowing exemption, it is to be exempted. If not, tax is to be levied. No exemption can be granted by inference or analogy. No supply can be taxed or excluded from tax on the basis of intention or scheme of the Act.
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The cont
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ration but rather a case of supply of goods on consideration payable in installments agreed between the contracting parties. Besides, as per para 1(c) of Schedule II of the OGST/CGST Act ,any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods and not a service.
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Expenditure borne by the Central Government, State Government or Union territory administration – Held that:- It is quite clear that as per the contract, payment for the work done is to be made by OKCL and not the state government, though the source of funding the expenditure is by the State Government.
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Recipient of the service OKCL is a body corporate which cannot be regarded as Government – The supply undertaken by the applicant is in the nature of composite supply, service provided or to be provided is not exclusively in the nature of training programme – Though the source of funding f
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y No. 72 of Notification No.12/2017-Central Tax read with Entry No. 72 of Notification bearing SRO No. 306/2017-Finance Department, Government of Odisha to the services provided by them under the ICT @ School Project. They enclosed copy of challan as proof of payment of ₹ 10,000/-bearing CIN No.PUNBI8032100004499 dated 05.03.2018 towards the fee for Advance Ruling . After due verification of the Application and other aspects, the application is admitted. 1.1 Entry No. 72 of Notification No. 12/2017-Central Tax being relevant is quoted below: S. No. Chapter, Heading, Group or Service Description of Services Rate (per cent) Condition (1) (2) (3) (4) (5) 72 Heading 9992 Services provided to the Central Government, State Government, Union territory administration under any training programme for which total expenditure is borne by the Central Government, State Government, Union territory administration. Nil Nil * Entry No. 72 of Notification SRO No. 306/2017-Finance Department is ide
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SI No.72 relates to educational training only. Again, under the heading 9992, the following services are also included under the detail head 999294 which is quoted below. 999294 Other education and training services n.e.c. This service code includes: i. training for car, bus, lorry and motorcycle driving licences ii. training for flying certificates and ship licences iii. computer training services iv. management training services v. services provided by music c. .ips, science camps, computer camps and other instructional camps, except for sports vi. education services not definable by level This service code does not include: services related to literacy programmes for adults, cf. 999220, 999231 higher education services comparable to the regular education system, cf. 99924, 99925 cultural education services, cf. 999291 education services provided by instructors, coaches, etc., as part of sporting activities, cf. 999292 Thus education and training services are also included under the
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of equipment and provision of computer training services for 5 years in 4000 schools divided in 6 zones on the BOOT Model basis. The Applicant was the successful bidder and was awarded the tender vide Letter of Award No. OKCL/SME/47/04 dated 12th July, 2013 to execute the contract in 5 zones. Accordingly, the Applicant entered into an agreement with OKCL on 12th September, 2013. 2.1 The Applicant has further submitted that in terms of the agreement and as per the specifications laid down in the tender document and the decision of the technical committee, all activities i.e. site preparation, installation and commission are to be completed in the time prescribed in the agreement, i.e. 4 months from the date of handing over of the sites by OKCL. Once the labs are ready, the Applicant shall operate the same for imparting computer training. For this, they are required to provide one teacher, having specified qualifications and experience, to each school. The teachers so appointed would uti
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ion, commissioning, site maintenance, operation, etc. to implement ICT Projects in the government schools and government aided schools in the state of Odisha. All the activities undertaken under ICT Projects are naturally bundled. Further, the national level policy framed by the Central Government for implementation of ICT Projects provides that the State Govemment(s) should preferably follow BOOT model. This suggestion of the Central Government is in fact being followed by the State Governments. Multiple state governments are awarding the contracts for implementing ICT Projects on BOOT model only. In all such cases, the private parties are implementing ICT Projects under BOOT Model, wherein, all the activities including supply, installation, commissioning, operation, maintenance, and computer training are to be performed by such private parties. It is a matter of fact that competitors of Applicant are also providing similar bundle of services to other State Governments under ICT in sc
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rs of the government id government aided schools. The entire infrastructure is being developed for imparting computer training and that the Applicant is engaged in single supply of computer training services to the state of Odisha. 3.3 Further, they stated that in terms of the agreement, during the period of contract (i.e. 5 years), the operation and maintenance of the entire IT infrastructure, equipment is to be carried out by the Applicant on its own cost. During this period, the ownership of the equipment and infrastructure remains with the Applicant. In fact, the repair and maintenance of the equipment and infrastructure is performed by the Applicant, so that it may continue to provide computer training during the contract period in a smooth manner without any obstruction. 3.4 The applicant also submits that the activities undertaken are under BOOT model basis and therefore, the ownership in the infrastructure developed by it would be transferred after the expiry of the contract pe
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uctions of OMSM. Thus, it would be incorrect to say that the Applicant is providing services to OKCL which, in turn, is providing services to OMSM, Government of Odisha. It is abundantly clear that the Applicant is engaged in providing computer training services to OMSM, Government of Odisha through OKCL. 4. The Personal Hearing was fixed on 03.05.2018 under due intimation to the Applicant, the Jurisdictional Officer of State GST & the Jurisdictional Officer of Central GST (intimated through their respective Commissionerate along with a copy of the application and the written submission of the Applicant). The Applicant appeared through its Advocate and representatives and the Jurisdictional Officer of State GST & the Jurisdictional Officer of Central GST appeared in person. During personal hearing, the applicant was asked to explain and justify as to how the service supplied by them is a 'training programme' and if it is a training programme, what is the course content,
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internet, etc. are given to them. The course curriculum of Information Technology subject was provided to students of Class VIII, IX and X under ICT Project. Sri Sharma also stated that the Applicant is also conducting IT exams for the students studying in the schools covered under the ICT Project. Besides the students, the teachers as well as the head of the school are also imparted training to augment their skill with regard to computer-aided learning. The teachers are trained to use technology for delivering subject specific lectures to the students. Further, the teachers are also given training as and when required which includes hand holding during the technology- aided classes. Subject based training is also being facilitated through e-content (multimedia content developed by State duly mapped with curriculum) which is also coordinated by the School Coordinator on daily basis. He further submitted that the expenses incurred by Applicant towards the salary component of the school
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for by the applicant, relevant facts having bearing on the question/issue raised, the Applicant's understanding/interpretation of law in respect of the issue. The Jurisdictional Officer of State GST, i.e. DCCT, Bhubaneswar III Circle filed a written counter countering the averments of the applicant which was also considered and a copy thereof was supplied to the Applicant for reference and counter, if any. 5.1 The applicant has sought advance ruling and filed Form GST ARA-01 before the Odisha Authority for Advance Ruling on 27.03.2018. The only question asked in the application is as to whether the supplies made by the Applicant to the Government and Government aided higher secondary schools in Odisha under the ICT Project, are covered under the scope of Entry No. 72 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. 5.2 For deciding the issue i.e. applicability of "Entry at SI No.72 of the Notification No. 12/2017 dated 28.06.2017 and similar Notification issue
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and development through universalization and integration of Information Technology in teaching, learning and educational management processes in particular and socio-economic transformative processes in general. OKCL can sue and be sued in its own name and capacity distinct from its owners. The Government, being the Union or State Government, on other hand, can also sue and be sued, but in the name of Union of India or the Government of a State as empowered under the Article 300 of the Constitution of India 1949. Article 300 of the Constitution of India 1949 is applicable to Government and does not apply to OKCL. The OKCL being a registered entity under the Companies Act 1956 can execute all contracts in its own name and capacity. The Union or State Government , can also execute contracts made in the exercise of the executive power of the Union or of a State, and shall be expressed to be made by the President, or by the Governor of the State under Article 299 of the Constitution of Ind
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L is neither the State Government nor a part of the State Government of Odisha and therefore the supplies by the applicant to OKCL should not be held to be a supply to Government. The officers representing Central Tax Administration also took similar contention and countered the submission that the supply by the Applicant was implicitly to Government and not to OKCL. They (the Central Officers) were of the view that the supply is to OKCL which is a body corporate promoted by Government but not Government by itself. 5.4 Before taking a final view on whether Supply has been provided by the Applicant to the State Government, we examined the relevant documents and found that work order has been issued by the Odisha Knowledge Corporation Limited (OKCL) in their own capacity and the Applicant has signed agreement with OKCL on 12.09.2013 for implementation of the ICT @ school project in Government and Government aided higher secondary schools across the State of Odisha. When the" contrac
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o Government of Odisha but to OKCL, a separate distinct entity created by the Government of Odisha. 5.6 Coming to the second pre-requisite of the entry whether the service provided by the applicant merits 'under any training programme'. The concerned state authorities stated that the applicant has entered into a contract with Odisha Knowledge Corporation Ltd.(OKCL) for implementation of the ICT @ school project in Government and Government aided higher secondary schools across the State of Odisha .The project aims to create digital literacy among students and teachers of government and government aided schools by setting ICT (Information & Communication Technology) Labs and providing manpower services to manage them for a period of five years. They referred to Clause-8 of the agreement dt.12.09.2013 between the applicant and OKCL at Annexure-D of the Application which enumerates the 'Roles and Responsibilities of IL & FS ETS. (the Applicant) As enumerated therein, t
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ng service under any training programme, but to create necessary infrastructure in schools for implementation of ICT project to help teachers in using smart boards and e-contents and promote e-literacy among students. The averment of the State Jurisdictional Officer is found to be logical and convincing. As forthcoming from the terms of the Contract, the intended Supplies are not just supply of Service but rather a composite supply of Goods i.e. hardware and network equipments, power equipments, maintenance of the computer hardware and network equipments and also imparting training on use of such equipments as per the syllabus prescribed by the Board of Secondary Education of Odisha. Thus, it will be incorrect to dub the entire project as a training programme. It is rather a composite supply of goods and services, not naturally but artificially bundled having distinctly separate components with distinct value attributable to each of the components. 5.7 Now we intend to examine as to wh
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n system, interactive white board, computer hardware, connected accessories, installation of soft ware and other allied accessories, site preparation, maintenance of equipment and provision of computer education services for 5 years in 3409 Govt, and Govt. aided high schools of Odisha under ICT@school project in the state of Odisha. The total contract value is ₹ 617,18,63,000/-. Thus, the contract is clearly for supply of goods and services including training. It is a composite supply having distinctly identifiable components with distinct value attributable to each of the components. As clearly mentioned in para 3.1 of the agreement 38.17% of the total contract value represents the amount payable for supply of hardware and connected accessories and the balance amount is on account of different services to be provided with includes maintenance of the hardware and network equipments, up keeping of the ICT lab, telephone and internet charges, electricity charges and fuel for genera
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such transfer will not be a taxable supply. Thus, there was no supply of goods either during or after the contract period. The aforesaid contention of the applicant lacks credence and acceptability for the reason that, as per the payment schedule agreed upon between the contracting parties, the applicant will receive the entire consideration for supply and installation of goods in installments before expiry of the contract period. Thus, it is not a case of transfer of goods without consideration but rather a case of supply of goods on consideration payable in installments agreed between the contracting parties. Besides, as per para 1(c) of Schedule II of the OGST/CGST Act ,any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods and not a service. In view of this, the second condition/pre-requisite is not satisfied. 5.10 As regards expenditure borne by the Cen
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supply can be taxed or excluded from tax on the basis of intention or scheme of the Act. In view of the foregoing discussions, we pass the following. RULING (a) Recipient of the service OKCL is a body corporate which cannot be regarded as Government. (b) The supply undertaken by the applicant is in the nature of composite supply. It includes supply of goods and services which are not naturally bundled. Each of the components of the composite supply are distinctly identifiable both in terms of quantify and value. The service provided or to be provided is not exclusively in the nature of training programme. (c) Though the source of funding for the service is the state Government and Central Government, yet, as per the contract, the payment responsibility is vested on OKCL. Therefore, the activities of the applicant by way of supply, of goods valid services under the ICT project are not covered under Entry 7.2 of the notification no.12/2017 dated 28.06.2017, to be entitled to the benefit
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