EXEMPTION FROM GST

 2020 (10) TMI 811 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA

IN RE: M/S. VIMOS TECHNOCRATS PRIVATE LIMITED,

Exemption from GST - benefit of N/N. 12/2017-Central tax (Rate) dated 28.06.2017 - pure consultancy services provided to the Municipalities and Corporations - taxability of pure consultancy services provided to the private individuals - rate of tax - input tax paid on the purchase of capital goods like furniture, computer, lab equipments, drone cameras, total station, auto level instruments, etc., and on certain services.

HELD THAT:- The applicant is involved in the rendering pure consultancy services like project management consultancy services including construction, supervision, quality control, rejuvenation and development of lakes. The applicant is also involved in the preparation of detailed project report for pumping treated water, scientific landfill at Bengaluru quarries, construction of Raja Nala and Other development civil works etc. The applicant provides these services mainly to the Municipalities, Corporations (i.e. local bodies) and to Government Departments and only in a few cases, a pure consultancy service is being provided to private parties - the work undertaken by the applicant reveals that he is providing majority of his services to the BBMP and Government Departments and to the smaller extent to the private individuals.

The ‘pure services’ provided to Central Government or State Government or to a local authority or Governmental authority in relation to any function entrusted to a Municipality under Article 243W of the Constitution is exempt from payment of tax - the BBMP and Sindhanur Municipality come under the definition of local authority and the service provided by the applicant to BBMP and Sindhanur Municipality is the service rendered to the local authority.

The applicant providing pure services (without supply of goods) to the Local bodies and to the Department of the State Government. The services provided by the applicant are in relation to the function entrusted to the Municipality under article 243W of the constitution. Hence the applicant is entitled to the benefit of Sl. No. 3 of Notification No.12/2017-Central Tax (Rate), dated 28th June 2017.

Benefit of Input Tax Credit - HELD THAT:- Sub-section 2 of section 17 of the CGST Act 2017 clearly says that, the amount of credit shall be restricted to so much of the input tax as is attributable to the taxable supplies including zero-rated supplies - Since the applicant providing both taxable and exempted supplies, applicant has to restrict the input tax paid on the capital goods to the extent of taxable supply of services.

No.- KAR ADRG 52/2020

Dated.- October 9, 2020