The Gujarat Appellate Authority of Advance Ruling (AAAR) has affirmed that no Goods and Service Tax (GST) is leviable on government consultancy services.
The bench of B V Siva Naga Kumari and Rajeev Topno has quashed the AAR ruling and observed that the claim for exemption under Notification No. 12/2017-CT (R), which exempts pure services of the functions entrusted to Panchayats (Article 243G) and Municipalities (Article 243W) of the Constitution of India.
The appellant, Devendra Kantibhai Patel is the business of furnishing works contract services (WCS) and engineering consultancy, specifically preparing and providing plans, estimates, and Draft Tender Plans (DTP) for building works, claimed that such services come beneath the operations specified in the 11th and 12th schedules of the Constitution, hence qualified for exemption.
The issue raised was Whether providing services of preparing and providing plans and estimate and preparing and providing DTP [Draft Tender PlanJ for the building work provided by the assessee to the R&B department, Government of Gujarat under the contract would qualify as an activity in relation to Panchayat or Municipality under Article 243 G or Article 243 W respectively, of the Constitution of India.
GAAR held against the same, quoting the absence of particular building information furnished by Patel at the time of the initial application. The GAAR provides the reason that without comprehending the nature and purpose of the buildings, it cannot decide if the services are pertinent to the Panchayat or the Municipality functions.
The applicant at the time of the plea furnished a list of projects for which the consultancy services were furnished, a significant information missing from the original application. The same new data stirred the AAAR to acknowledge that the ruling of GAAR was incurred without acknowledging significant facts.
The AAAR stated that GAAR however,delivered its ruling without the benefit of examining the data, since it was provided for the first time before the Appellate Authority for Advance Ruling. In light of such a peculiar situation, in the interest of justice, it is appropriate to remand back the matter to the GAAR.
Ruling Details
Applicant Name: M/s Devendra Kantibhai Patel
Date: 28.02.2025
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