In Re: Tamil Nadu Water Investment Company Limited
GST
2019 (2) TMI 187 – AUTHORITY FOR ADVANCE RULING, TAMILNADU – 2019 (21) G. S. T. L. 342 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, TAMILNADU – AAR
Dated:- 28-11-2018
Order No. 21\/AAR\/2018
GST
MS. MANASA GANGOTRI KATA, IRS AND THIRU S. VIJAYAKUMAR, M.SC., MEMBER
\nNote : Any Appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT\/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated.
\nAt the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a re<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n \n2.1 The Applicant has stated that they have entered into agreement with CMWSSB for = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n or Smart City Mission of T.Nagar Chennai with CMWSSB, which are ongoing for Consultancy Services for Design and Supervision, including Supply of Manpower for the same. They undertook to submit Invoices, Payment Advice and Certificate from CMWSSB on Ownership, so as to be eligible for exemption under SI.No.3 of Notification No. 12\/2017 Central Tax (Rate) dated 28.06.2017, as it involved Governmental Authority involving Water Treatment Plant (Tertiary Treatment Reverse Osmosis (TTRO). The Applicant has furnished copy of Invoices raised on CMWSSB in respect of Project Management Consultancy Services (PMC) to the proposed Tertiary Treatment Reverse Osmosis (TTRO) plants at Koyambedu and Kodungaiyur and for Smart City Mission of T.Nagar Chennai; Letter dated 25th May 2018 from CMWSSB on ownership along with enclosures and Copy of Agreement entered into with CMWSSB for Project Management Consultancy Services of Chennai T.Nagar under Smart City Mission. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n of equipment and materials required for construction and commissioning, be responsible for Environmental and social management and sign-off on the expenditure by the project executing authority. As per the contract, the Applicant will be paid for all staff costs, Sub-consultants costs, printing, communications, travel, accommodation and all other costs incurred in carrying out the services. The payment will be on actual cost of deployment of man-power who are specified in the contract. It is seen from the invoices already raised that the Applicant is being paid for “Consultancy Fee towards Project Management Consultancy (PMC) for setting up of 45MLD capacity Tertiary Treatment Reverse Osmosis (TTRO) Plant at Kodungaiyur and Koyambedu. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n under Smart City Mission”. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s”, as it is an activity in relation to any function entrusted to a Municipality under Article 243W of the Constitution and not reimbursed the GST component of the invoice. The issue to be decided is whether the Applicant is rendering Pure Services' and whether CMWSSB is a 'Governmental authority' as defined in the Notification No. 12\/2017. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n by an Act of Parliament or a State Legislature; or (ii) established by any Government, with 90per cent, or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution.” = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n 2017-Central Tax (Rate) 28th June 2017. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ority” relating to water supply for industrial use and sanitation conservancy which are covered under Twelfth Schedule of Article 243 W of the Constitution. Therefore, the services rendered by the Applicant are exempted from CGST under SI.No. 3 of the Notification No. 12\/2017-Central Tax (Rate) dated 28th June 2017 as amended and exempted from SGST under Sl.No. 3 of the G.O. (Ms) No. 73 dated 29.06.2017 No.II (2)\/CTR\/532(d-15)\/2017 as amended. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re: Tamil Nadu Water Investment Company LimitedGST2019 (2) TMI 187 – AUTHORITY FOR ADVANCE RULING, TAMILNADU – 2019 (21) G. S. T. L. 342 (A. A. R. – GST)AUTHORITY FOR ADVANCE RULING, TAMILNADU – AARDated:- 28-11-2018Order No. 21\/AAR\/2018 GSTMS. MANASA GANGOTRI KATA, IRS AND THIRU S. VIJAYAKUMAR, M.SC., MEMBER Note : Any Appeal against … Continue reading “In Re: Tamil Nadu Water Investment Company Limited”<\/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-16545","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16545","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=16545"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16545\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16545"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16545"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n * Project Management Consultancy for the work Construction Management and Supervision including off-site inspection for the proposed design, Build and Commissioning of 45 MLD capacity Tertiary Treatment Reverse Osmosis(TTRO) Plant at Kodungaiyur &Koyambedu, Chennai City
\n * Consultancy Services for preparation of Detailed Project Report for providing Smart Water Supply and Sewerage Services in T.Nagar, Chennai City, under Smart City Mission
\n2.2. The Applicant has stated that in the pre-GST regime and as per the Special Conditions of the agreement entered into by Applicant with CMWSSB, the Service Tax paid by the Applicant was reimbursed by CMWSSB up to Febraury '2017 and with the introduction of GST from 01.07.2017, the Applicant charged GST on the Invoices raised by it on CMWSSB. However, CMWSSB is of the view that Project Management Consultancy Services (PMC) rendered by the Applicant is exemp<\/p>\n
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\n4.0 Submissions of the Applicant were <\/p>\n
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\n4.1 The Applicant has also entered into contract with CMWSSB for Consultancy Services for preparation of detailed project report for providing smart water supply and sewerage services in T Nagar under Smart City Mission. The project is to Design, Devel<\/p>\n
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\n4.2 The Applicant has also submitted a letter from Managing Director, CMWSSB to the Applicant stating that CMWSSB is a Governmental Authority as per Section 2(16) of IGST Act. It is a Board constituted by an Act of Tamil Nadu State Legislature called “Chennai Metropolitan Water Supply and Sewerage Act, 1978” with 100% contribution by way of Government ( by way of takeover of Assets and Liabilities from Chennai Municipal Corporation and Tamil Nadu Water Supply and Drainage Board) and controlled by the Government by way of appointing Directors of the CWSSB Board to carry out the functions of supplying water for Domestic, Industrial and Commercial purposes as well as Sanitation Conservancy by way of disposal, which is entrusted to a municipality under Article 243W of the Constitution. The related copies of the Act and Annual Report were enclosed which supports the statement made in the letter of CMWSSB. It is seen that the Minister and Secretary in charge of “W<\/p>\n
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\n6.1 The relevant extract of SI.No. 3 of Notification No. 12\/2017-Central Tax (Rate) dated 28th June 2017 and the relevant definitions are extracted below for ease of reference:
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\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\n<\/p>\n
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\nFrom the above, it is evident that if any “Pure Services” are provided to a Governmental Authority by way of any activity in relation to any function entrusted to a municipality under Article 243 W of the Constitution and that 'Governmental Authority' is an Authority or a Board set up by an Act of Parliament or a State Legislature or established by the Government with 90 percent or more participation by way of equity or control to carry out any function entrusted to a municipality under article 243 W of the Constitution, then the same is exempted vide SI.No. 3 of the Notification No. 12\/2017-Central Tax (Rate) referred above.
\n6.2 In the case at hand, from the documents fu<\/p>\n
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\n6.3 On perusal of the agreements furnished by the Applicant, we find that the Applicant provides Project Management Consultancy Services, including Supervision of the Construction Works including Design, Testing Quality Assurance, carry out 3rd party inspection of equipment and materials required for construction and commissioning, be responsible for Environmental and social management and sign-off on the expenditure by the project Executing Authority, to CMWSSB for Construction Management and Supervision including off-site inspection for the proposed Design, Build, Commission of 45 MLD capacity Tertiary Treatment Reverse Osmosis (TTRO) Plant at Kodungaiyur and Koyambedu, for recycling and reusing of waste water for the uses other than drinking purposes to various industries. The Applicant will be paid for all staff costs, Sub-consultants costs, printing, communications, travel, accommodation and all other costs incurred in carrying out the serv<\/p>\n
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\n7. In view of the foregoing, we rule as under:
\nRULING
\nThe activity of the Applicant as per the three contracts entered into with Chennai Metro Water Supply and Sewerage Board i.e. for Project Management Consultancy (PMC) Services entered by Applicant with CMWSSB for construction management and supervision including off-site inspection for the proposed design, build, commission of 45 MLD capacity Tertiary Treatment Reverse Osmosis (TTRO) Plant at Kodungaiyur and Koyambedu and for Consultancy Services for preparation of detailed project report f<\/p>\n
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