No GST exclusion on Professional counseling administrations gave to Local Authority: Gujarat AAR

  • GST
  • Case Law
  • financeseva

Fact of the Case 

  • The applicant provides a wide range of professional consulting services including Architecture, Engineering (MEPF), Planning, Urban Design, Landscape, Research and Art, Building Design, Interior Design, etc.  
  • He got work orders from Surat Municipal Corporation, Ahmedabad Urban Development Authority, Pune Municipal Corporation, Executive Engineer, Public Works Division, Pune and Rajkot Smart City Development ltd. for giving Designing, Architectural, Consultancy administrations. 
  • It has sought an advance ruling to determine whether the said services can be covered under Entry No. 3 of Notification No. 12/2017 - Central Tax (Rate), dated 28-6-2017 i.e., may be exempt from GST. 

Judgement 

  • The Authority for Advance Ruling ('AAR') saw that to guarantee the exclusion, the administrations gave ought to be unadulterated administrations. The stock of administrations without including any stockpile of products would be treated as an inventory of 'unadulterated administrations'. 
  • Further, the same services shall be provided to the Government and in relation to any function entrusted to a Panchayat under article 243G of the Constitution or then again according to any capacity depended to a Municipality under article 243W of the Constitution. 
  • Upon reviewing the contract with the Surat Municipal Corporation, Ahmedabad Urban Development Authority, Pune Municipal Corporation, Executive Engineer and Public Works Division Pune, it appears that the services like Construction of town hall or building, electrification services, Architectural services, etc. The supply of goods and are not pure services.  
  • Furthermore, the contract entered between the appellant and Rajkot Smart City Development LTD specifies that the Contract Price is inclusive of all taxes and therefore GST shall be paid to the Government.  
  • The AAR did not examine the other two conditions i.e., the recipient is a state government or not and the function shall be assigned 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. Thus, The AAR ruled that exemption cannot be available for any of the above contracts and hence the appellant cannot avail the benefit of exemption and is liable to pay the GST.