The Maharashtra Authority of Advance Ruling (AAR) ruled that work allotted by Maharashtra Jeevan Pradhikaran as part of Jal Jeevan Mission exempted from GST.
The AAR held that 18% GST shall be payable in respect of work allotted by Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India which is performed & invoiced after 01.01.2022 but which is allotted before 01.01.20227.
The Authority stated that 18% GST in respect of work allotted by Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed & invoiced after 01.01.2022.
The AAR held that Maharashtra Jeevan Authority is the service receiver within the meaning of Section 2(93) of CGST/MGST Act in respect of amounts received as grants by MJP which are paid to the applicant on services provided before 01.01.2022.
Issue Raised
What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhikaran (‘MJP’) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed & invoiced before 01.01.20227?
What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhikaran (‘MJP’) as a part of Jal Jeevan Mission which is a mission of Government of India which is performed & invoiced after 01.01.2022 but which is allotted before 01.01.20227?
What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhikaran (‘MJP’) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed & invoiced after 01.01.2022)?
Who is the service receiver within the meaning of Sec.2(93) of CGST/MGST Act in respect of amounts received as grants by MJP which are paid to the applicant on services provided before 01.01.2022?
Facts
The Applicant is a partnership firm engaged in the business of providing technical consultancy to various Governments, Semi-Government, Government Corporations & Quasi-Government Institutions.
The Constitution of India envisages various functions and duties to be carried out at various tiers of Government. Villages, towns and cities require regular supply of water and proper facilities of sewage & used water disposal. The Constitution in its XI & XII Schedule has enumerated the duties to be performed by the State Govt & the Panchayat Raj Institutions under article 2436 & 243W respectively. For that purpose, the said Government institutions initiate appropriate water supply schemes, drainage schemes etc. The implementation of the above schemes requires meticulous engineering, planning & designing. Due to lack of manpower & expertise the said activity is outsourced to outside agencies by the respective Govt. The applicant is engaged in this activity of designing, planning, supervising the implementation of such schemes within the framework of rules & procedures laid down by the Government. The activity of the applicant is in the nature of pure services.
Hitherto, the activities have undisputedly been held to be exempted from tax by virtue of notifications issued under the CGST/MGST Acts. Even under the existing laws (Finance Act, 1994) the above activities were exempted. The applicable notifications under GST are reproduced as a matter of convenience.
On 18th November 2021 by Notification No. 16/2021 -Central Tax (Rate) the words “or a Governmental authority or a Government Entity” came to be omitted from Sr. 3 & 4 of Notification 12/2017.
Case Details
M/s. FORTRESS INFRACON LIMITED AND YASH INNOVATIVE SOLUTIONS LLP (JV)
Case No. 33 of 2023-24/2024-25 /B/56
Court: Maharashtra AAR
Date of Decision : 31/07/2024
Judges: Shri. Ajaykumar V. Bonde Joint Commissioner Of State Tax, (Member) And Ms. Priya Jadhav, Joint Commissioner Of Central Tax, (Member)
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