2018 (9) TMI 1037 – AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – 2018 (17) G. S. T. L. 140 (A. A. R. – GST) – Levy of GST – landscaping and gardening work for government departments – pure services – Entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017 – Whether landscaping and gardening work for government departments like BBMP, KSRTC, etc, through works contract attracts GST from this society?
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Held that:- Since the scope of exemption allowed in the entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017 is only to the extent of pure services of provision of urban amenities and facilities such as parks, gardens, playgrounds to the Governments and Local Authorities and does not cover any activity where in transfer of property in goods is involved either in the form of a works contract or a composite supply.
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The activity done by the applicant is of the nature of “maintenance of parks” and hence the activities can be
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overnment or a Local Authority (including BBMP) or a Governmental Authority, not involving transfer of property in goods either as a component of a works contract or a composite supply is covered under entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017 and hence exempt.
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This exemption is not available if there is any transfer of property in goods or if the service is made to persons other than State Government, Central Government or a local Authority or a Governmental Authority. – AAR NO. KAR ADRG 18/2018 Dated:- 6-8-2018 – SRI. HARISH DHARNIA, AND DR. RAVI PRASAD M.P. Represented by: Sri Vishwanath Bhat, Cost Accountant ORDER UNDER SUB-SECTION (4) OF SECTION 98 OF CENTRAL GOODS AND SERVICE TAX ACT, 2017 AND UNDER SUB-SECTION (4) OF SECTION 98 OF KARNATAKA GOODS AND SERVICES TAX ACT, 2017 1. M/s The Nurserymen Co-operative Society Ltd, (called as the Applicant‟ hereinafter), Lalbagh, Bengaluru 560 004, having GSTIN number 29AABAT4416F1ZK,
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rmation of parks in the Lands belonging to the Government and other Government Undertakings. The applicant has sought advance ruling in respect of the following question: Whether landscaping and gardening work for government departments like BBMP, KSRTC, etc, through works contract attracts GST from this society? 3. The applicant furnishes some facts relevant to the stated activity: a. The applicant maintains that Horticulture is the science and art of growing plants and includes landscaping, soil management, designing, construction and maintenance of gardens. He maintains that the said activity is covered under the entry no. 24 to the Notification No. 11/2017 – Central Tax (Rate) dated 28th June, 2017 under the Heading 9986, for which the tax rate prescribed is NIL under the CGST Act. Similar exemption is also available under the Karnataka Goods and Services Tax Act. b. The applicant also submitted a copy of an advance ruling issued by the Clarification and Advance Ruling Authority, G
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empted from tax. Further he has also quoted that 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 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 is exempted from tax vide entry no. 3 of Notification No.12/2017 – Central Tax (Rate) dated 28th June, 2017. He has also submitted a letter from the Bruhat Bengaluru Mahanagara Palike (BBMP) stating that BBMP is a local authority and maintenance of parks is a function entrusted under article 243W of the Constitution. Pure services provided to Local Authority (BBMP) under this article has Nil rate of GST and the BBMP has stated that he is not liable to make payment of GST for the maintenance of park works. 4
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(Rate) dated 28.06.2017 and hence is exempt. He also stated that the same services are not exempt if they are effected on behalf of KSRTC and other government undertakings, as they are neither government nor local bodies. 6. FINDINGS & DISCUSSION: 6.1 The entry no. 3 of the Notification No. 12/2017 – Central Tax (Rate) dated 28th June 2017 states that the tax rate in respect of 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 by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in in relation to a Municipality under article 243W of the Constitution is NIL . Bruhat Bengaluru Mahanagara Palike is a municipal corporation and hence covered under the term Local Authority . 6.2 The activity of maintenance of Parks is covered under the entry 12 of
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es principal supply as -principal supply" means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary'. 6.5 Concept of works contract Works contract has been defined under Section 2 (119) of CGST Act as follows: a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property_ wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract." 7. Per the above legal provisions, we understand that in present case, since the scope of exemption allowed in the entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017 is only to the extent of pure services of provision of urban amenities and facilities such as parks, gardens
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. The second activity falls in the ambit of works contract and hence is not covered under the entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017 even if it is provided to a Government or Local Authority and Governmental authority. 10. Further, in the question raised, whether the KSRTC and other entities fall under the Government departments, the learned representative, at the time of personal hearing has accepted that they are not covered under the entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated 28th June 2017 and hence there is no question of answering the same. 11. In view of the foregoing, we rule as follows RULING 1. The service of maintenance of parks provided by the society to the State Government, Central Government or a Local Authority (including BBMP) or a Governmental Authority, not involving transfer of property in goods either as a component of a works contract or a composite supply is covered under entry no. 3 of the
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