2018 (8) TMI 283 – AUTHORITY FOR ADVANCE RULINGS, MADHYA PRADESH – 2018 (16) G. S. T. L. 171 (A. A. R. – GST) – 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? – Held that:- 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 – the various objectives of both the above Schemes are covered in more than one clau
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cost includes the cost of service rendered along with reimbursement of cost of procurement of goods for rendering such service, and, thus, be eligible for exemption from levy of CGST and MPGST, respectively – Held that:- These items are not naturally bundled into the service being provided by the applicant Further, 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, 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 reimbursement of their costs from the employer will not affect eligibility of the applicant for NIL rate of tax in Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate), dated 28th June, 2017 and corresponding notification is
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from levy of CGST and MPGST, respectively. – Case No. 8/2018 Dated:- 22-6-2018 – 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 Development, Government of India has rolled out the Atal Mission for Rejuvenation and Urban Transformation ( AMRUT) for transforming urban India. 1.3 The Applicant has been appointed as Project Development
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s 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 cost basis. Such expenses are charged over and above the consideration for remuneration and reimbursable expenses of travel, office accommodation, per diem allowance etc. These assets are later on transferred to the Recipient b
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rmed 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 number 3of Notification No. 12/2017- Central Tax (Rate) dated 28 June, 2017[Notification No. FA -3-42/201711/v (53) dated 30 June 2017, as amended by Notification No. 2/2018- Central Tax (Rate) dated 25 January, 2018 issued under Central Go
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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) 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 Art
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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 Accordingly, we hold that the Consultancy services rendered by the applicant under the Agreement with Urban Administration & Development, Government of Madhya Pradesh, Bhopal for implementation of AMRUT and PMAY are in relation to functions entrust
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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 under Article 243W and to Panchayats under Article 243G of the Constitution, and therefore, it is exempt from tax being covered in Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate), dated 28th June, 2017 (as amended from time to time) issued under C
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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 reimbursement of their costs from the employer will not affect eligibility of the applicant for NIL rate of tax in Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate), dated 28th June, 2017 and corresponding notification issued under Madhya Pradesh Goods a
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ayat 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 procurement of goods for rendering such service, and, thus, be eligible for exemption from levy of CGST and MPGST, respectively. However, the disposal of tangible goods at the end of contract shall be subject to GST depending upon the circumstances and manner of di
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