In Re: M\/s. National Security Services
GST
2018 (12) TMI 228 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (20) G. S. T. L. 457 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 24-10-2018
GST-ARA-58\/2018-19\/B-132
GST
SHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, MEMBER
\nPROCEEDINGS
\n(Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
\nThe present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by NATIONAL SECURITY SERVICES, the applicant, seeking an advance ruling in respect of the following issue.
\nWhether the Exemption Notification No.12\/2017- Central Tax (Rate) dated 28\/06\/2017 (Entry No. 3 of the Notfn.) is applicable to the applicant for the Pure services i.e. Security Services rendered to Pimpri Chinch wad Municipal<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n Corporation. The Security Services are provided in form of providing Security guards to the sites of PCMC from where Water Supply is made to the city by PCMC, in other words we provide Security Services to Water Pump Houses, Purification Plants run by PCMC from where water supply is made to the city. Moreover, the Security Services are provided to Hospitals and Dispensaries run by PCMC. Also the Security Services are provided for Solid Waste Management, Slum Improvement undertaken by PCMC. Moreover the Security Services are also provided to PCMC in relation to Urban Planning including Town Planning, which is for Public Safety at large. All these Services are covered in article 243W of the Constitution as functions entrusted to Municipality. Consequently Sl. No. 3 of the Notification No. 12\/2017 – Central Tax (Rate) dated 28\/06\/2017 as amended squarely applies in the case of applicant and the Security Services provided to PCMC in relation to afore said functions entrusted to PCMC are ex<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ities in relation to the functions entrusted to them under Article 243W of the Constitution of India. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n this regard, as opined by the department that we are providing Assistants to the Security Guards of PCMC for the security arrangements. Therefore the question\/ issue involved is that, what are the exact duties being performed by the persons provided by us. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the situation like fire etc. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ovided by us. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n urban planning including town planning or any activity in relation to any function entrusted to Municipality under Article 243W of the constitution, is not tenable, as it is evident that the persons provided by us and security guards on the establishment of the PCMC form an entire security team and that the role of the persons provided by us is inseparable from entire security team as also can be seen from duty list and responsibilities cast on the persons provided by us by way of agreement (Annexure-A) to the agreement). Therefore persons provided by us clearly provide the services in relation to activities in relation the functions entrusted to Municipality under Article 243W of the Constitution and thereby entitled for the benefit of Exemption Notification No.12\/2017-Central Tax (Rate) dated 28\/06\/2017 (Entry No. 03 of the Notfn.). We are thus providing security services which are pure services in relation to the functions entrusted to Municipality (PCMC in this case) under ar<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rity guards or manpower services as contended by the department are exempt from GST under the aforesaid notification, since they are used in relation to functions entrusted to Municipality (PCMC) under article 243 W of the Constitution. We therefore request your honor to give the Advance Ruling accordingly. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n f Notification No.12\/2017-Central Tax (Rate) 28.06.2017) is as under: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the applicant appeared and made contentions as per details given in their application. Jurisdictional Officer, Ms. Himani Dhamija Bhange Patil, Asstt. Commissioner, Division – III, Pune -II, CGST Commissionerate appeared and stated that they have already made written submissions. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n MC eg. Tax Collection, Ward Offices, Water Supply & Workshop etc. Hence the services provided by the applicant pertaining to providing assistants to Security Guards of PCMC cannot be termed as Services in relation to Urban Planning including Town Planning or any activity in relation to any function entrusted to a Municipality under article 243W of the Constitution but can be termed as providing manpower services for the work of Security arrangements to various properties of PCMC. Therefore, the Exemption Notification 12\/2017-Central Tax (Rate) dt.28.06.2017 (Entry No. 3 of the Notification) is not applicable to the Security Services rendered to Pimpri Chinchwad Municipal Corporation. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n on and directions of the security guards who are on the establishment of PCMC, such persons are doing the security work in relation to urban planning and public safety at large. Further they have submitted that even assuming that their services are termed as manpower services for the work of security arrangements to various properties of PCMC, still the services provided by them fell under the ambit of the Exemption Notification No. 12\/2017-Central Tax (Rate) dated 28\/06\/2017 (Entry No. 03 of the Notfn.). = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n een from a reading of the said clause that exemption is extended to “Pure services… … .provided to … … … … … or local authority … … … by way of any activity in relation to any function entrusted to a … … … … … Municipality under article 243W of the Constitution.” = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re: M\/s. National Security ServicesGST2018 (12) TMI 228 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (20) G. S. T. L. 457 (A. A. R. – GST)AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AARDated:- 24-10-2018GST-ARA-58\/2018-19\/B-132 GSTSHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, MEMBER PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Act, … Continue reading “In Re: M\/s. National Security Services”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-15341","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15341","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15341"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15341\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15341"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15341"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15341"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nThe aforesaid Services being provided by the applicant are without any material and thereby the said Services are the Pure Services as contemplated by the aforesaid exemption notification.
\nThe condition of the notification that Services should be provided to the Municipality is also satisfied by the applicant.
\nThe next condition i.e. the Services should be in relation to the functions entrusted to the Municipalities under Article 243 W of the Constitution is also satisfied by the applicant.
\nIn view of the aforesaid, the applicant is of the view that Security Services provided by them to PCMC are exempt from GST.
\nAdditional submissions by applicant.
\nIn this context our written submissions given during preliminary hearing held on 23\/08\/2018 may please be referred. The written submissions dated 21\/08\/2018 filed by the Deputy Commissioner, Div. III (Deccan) CGST Pune-II Commissioner<\/p>\n
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\nIn this context we would like to clarify that, even though the concerned documents refer to the word 'Assistant, in fact what we are providing are the Security Guards. The reason behind using the word assistant (Madatnis) in the contract and other relevant documents is that the security guards provided by us are working under the overall supervision of the Security Guards, who are on the establishment of the PCMC. However the persons provided by us are performing the duties of Security Guards only and carry out the entire function of the security and also responsible for the same .
\nThese facts are also evident from the duty list and functions which have been mentioned in 1 Annexure- A to the agreement between us and PCMC. The sai<\/p>\n
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\n5) They are supposed to wear proper uniform and display their IDs on their shirts. In case of emergency they should be able to coordinate with Police, Fire Brigade and Hospitals by having updated telephone numbers of these organizations. In case of any untoward incident like theft etc. they are supposed to coordinate with the security department and also coordinate with police under the guidance of security department
\n6) They are supposed to work in three shifts or as and when required.
\nAll these duties and responsibilities cast by PCMC by way of agreement on the guards provided by us indicate that the security guards provided by us are not mere assistants \/ helpers (Madatnis) because they are fully responsible for the security of the entire premises and also supposed to handle the emergency situation like fire, theft etc. and are to coordinate with important organization like police, fire brigade, hospitals etc. Only the thing is that they are suppos<\/p>\n
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\nThe aforesaid facts are also evident from the clarification issued by PCMC in this regard. The said clarification is enclosed herewith for your ready reference. (E:1)
\nFrom the gist of the said clarification, it can be seen that the competent authority that is Assistant Commissioner (Security) PCMC, Pune-411018 has clarified that, as per Annexure -A of the agreement (Duty list Sl.No.02 to 12) even though the persons provided by us are working under the supervision and directions of the security guards who are on the establishment of PCMC, the persons provided by us are doing the security work in relation to urban planning and public safety at large.
\nMoreover in support of our contention that the persons provided by us are discharging the duties of security guards only, we hereby submit the photo copy of ID cards of 5.3\/6.6 security guards issued by us being used by the persons provided by us for security work. These ID cards are displayed on the uniforms of the persons <\/p>\n
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\nWe also request your honor that, in case any additional point is raised by the department to oppose the Said application, we may be given opportunity to present our say on the points raised by the department.
\n03. CONTENTION – AS PER THE CONCERNED OFFICER
\nThe submission, as reproduced verbatim, could be seen thus-
\nQuestion on which advance ruling is required:
\n Whether Exemption Notification 12\/2017-Central Tax (Rate) dt.28.06.2017 (Entry No. 3 of the Notification) is applicable to the applicant for the pure services i.e. Security Services rendered to Pimpri Chinchwad Municipal Corporation in relation to functions entrusted to Municipality under Article 243W of the constitution<\/p>\n
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\nSl.No.
\nChapter, Section, Heading, Group or Service Code(Tariff)
\nDescription of Services
\nRate (percent.)
\nCondition
\n1.
\nChapter 99
\nPure 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.
\nNil
\nNil
\nArticle 243W of the Constitution reads as under:
\n243W. Powers, authority and responsibilities of Municipalities, etc Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow
\n(a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-gov<\/p>\n
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\n6. Public health, sanitation conservancy and solid waste management.
\n7. Fire services.
\n8. Urban forestry, protection of the environment and promotion of ecological aspects.
\n9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded.
\n10. Slum improvement and up gradation.
\n11. Urban poverty alleviation.
\n12. Provision of urban amenities and facilities such as parks, gardens, playgrounds.
\n13. Promotion of cultural, educational and aesthetic aspects.
\n14. Burials and burial grounds; cremations, cremation grounds and electric crematoriums.
\n15. Cattie pounds; prevention of cruelty to animals.
\n16. Vital statistics including registration of births and deaths.
\n17. Public amenities including street lighting, parking lots, bus stops and public conveniences.
\n18. Regulation of slaughter houses and tanneries.
\nIn the opinion of this office, the services provided by M\/s. National Security Services pertains to providing assi<\/p>\n
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\n05. OBSERVATIONS
\nWe have gone through the facts of the case, documents on record and the submissions made by the applicant
\nThe applicant has submitted that they have entered into an agreement with Pimpri Chinchwad Municipal Corporation (PCMC) to provide Security services to them. The Security Services are provided in form of providing Security guards; to Water Pump Houses, Purification Plants run by PCMC from where water supply is made to the city; to Hospitals and Dispensaries run by PCMC; for Solid Waste Management, Slum Improvement undertaken by PCMC; in relation to Urban Planning including Town Planning, which is for Public Safety at large. According to their submissions all these Services are covered<\/p>\n
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\nVide further detailed submissions the applicant has stated that the security guards provided by them are working under the overall supervision of the Security Guards, who are on the establishment of the PCMC and they are carrying carry out the entire function of the security. They have also cited the duti<\/p>\n
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\nWe find that there is no doubt in anyone's mind that the personnel provided by the applicant to the PCMC are actually aiding and helping the security guards of PCMC The only question that needs to be looked into is Whether the activities of the applicant's personnel who are there to assist\/help the security guards of PCMC can be equated with as being in relation to any function entrusted to a Municipality under article 243W of the Constitution?. If the answer is yes then it is Clear <\/p>\n
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\nIn the subject case the applicant is providing pure services (without the supply of goods), as submitted by them, to PCMC. We find that the said services are in relation to any functions entrusted to a Municipality under article 243W of the Constitution. The agreement between the applicant and PCMC very clearly states that the applicant shall provide assistants to the Security Guards of PCMC. The invoice raised by the applicant mentions services rendered as, “Being round the clock helper to security service Providing assistance to the Security Guards of PCMC is an activity in relation to various functions as enumerated above which have been entrusted to a Municipality under article 243W of the C<\/p>\n
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