2019 (1) TMI 486 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL – TMI – TDS liability under GST – Specified person u/s 51(1) – supplies from a public sector undertaking to another public sector undertaking – Public Sector Undertaking or not?. – Held that:- The Applicant has nowhere disputed that it has been established by the Government. The Application is silent on this issue.
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Section 51(1) of the GST Act, read with the Notification as amended from time to time, mandates that certain categories of recipients shall deduct tax at source at a percentage while making payments to the suppliers above a threshold. Such recipients include inter alia an authority or a board or any other body set up by an Act of Parliament or a State Legislature or established by any Government with 51% or more participation by way of equity or control to carry out any function – As the GST Act does not define “Control”, it should be construed as defined under the Companies Act, 2013. Section 2(27) of the C
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Governments, therefore, “control” the Applicant within the meaning of Section 2(27) of the Companies Act, 2013.
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Clause a (ii) of the Notification is, therefore, applicable for the Applicant if he is established by government notification.
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Ruling:- The Applicant, if established by government notification, is liable to deduct tax at source under section 51(1) read with Notification No. 1344-FT dated 13/09/2018, being a company controlled by the Central and the State Governments. – Case No 30 of 2018 Order No. 32/WBAAR/2018-19 Dated:- 8-1-2019 – SYDNEY D SILVA AND PARTHASARATHI DEY, MEMBER Applicant s representative heard Sri Jaydip Guha Ray, Authorized Representative 1. The Applicant, stated to be a joint venture company formed by West Bengal Industrial Development Corporation (hereinafter WBIDC) – a Govt of West Bengal undertaking, and the group of companies of Andrew Yule & Co Ltd (a Central Govt under taking), wants a ruling on applicability of Notification No. 1344 –
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rvices, where total value of such supply under a contract exceeds 2,50,000/-. The Notification, as amended from time to time, states that the provisions of section 51 of the GST Act shall come into effect from 01/10/2018 with respect to the persons specified under clauses (a), (b) and (c) above, and to the persons specified below under clause (d) of section 51(1): (a) An authority or a board or any other body – (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with 51% or more participation by way of equity or control, to carry out any function (b) Society established by the Central Govt or the State Govt or a local authority under the Societies Registration Act, 1860; (c) Public sector undertakings. However, the Notification shall not apply to the authorities under the Ministry of Defence, other than the authorities specified in the Annexure-A of Notification No. 57/2018 – CT dated 30/10/2018. Furthermore, the Notification shall not appl
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ctor Undertaking , where 51% or more of the paid-up share capital is held by the Central or the State Governments. The Applicant, therefore, argues that the Notification is not applicable on him. 4. The Applicant has nowhere disputed that it has been established by the Government. The Application is silent on this issue. This Authority, therefore, examines the matter based on the arguments put forward and information made available, keeping the above issue open. 5. Section 51(1) of the GST Act, read with the Notification as amended from time to time, mandates that certain categories of recipients shall deduct tax at source at a percentage while making payments to the suppliers above a threshold. Such recipients include inter alia an authority or a board or any other body set up by an Act of Parliament or a State Legislature or established by any Government with 51% or more participation by way of equity or control to carry out any function. As the GST Act does not define Control , it s
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asting vote of the Chairman) in a nine member Board. The Central and the State Governments, therefore, acting through the government companies, are in a position to indirectly control the management or policy decisions of the Applicant. The Central and the State Governments, therefore, control the Applicant within the meaning of Section 2(27) of the Companies Act, 2013. Clause a (ii) of the Notification is, therefore, applicable for the Applicant if he is established by government notification. In view of the foregoing we rule as under RULING The Applicant, if established by government notification, is liable to deduct tax at source under section 51(1) read with Notification No. 1344-FT dated 13/09/2018, being a company controlled by the Central and the State Governments. This Ruling is valid subject to the provisions under Section 103(2) until and unless declared void under Section 104(1) of the GST Act. – Case laws – Decisions – Judgements – Orders – Tax Management India – taxmanag
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