Nirma University not liable to register itself as a Deductor under GST: AAR [Read Order]

The Gujarat Authority of Advance Ruling (AAR) ruled that Nirma University is not liable to register itself as a Deductor under GST.

The applicant M/s Nirma University is a University set up under a special Act passed by the Gujarat State Legislative Assembly and is registered with GST.

The applicant is established with the objectives of developing the knowledge of science and technology, dental, medial, paramedical, physiotherapy, pharmacy, commerce, management, education and humanities for the advancement of mankind.

It aims at establishing close linkage with the industry to make teaching, research and training at the university relevant to the needs of the economy at national and global level.

During the normal course of its operations, the applicant procures several inputs and input services. At times, it requires the assistance of an advocate and accordingly, procures legal services including but not limited to representational services from individual advocates, including senior advocates. These services form an important input service for the applicant.

The GST regime envisages two types of supplies which are covered under RCM. The first type depends upon the nature of supplies, which are covered under section 9(3) of the CGST Act, 2017. Section 9(3) includes the supplies of both goods and services. The second type being purchases made from unregistered suppliers which covered u/s 9(4) of the CGST Act.

The List of Services requiring discharge of GST under RCM under section 9(3) includes services supplied by an individual advocate, including a senior advocate by way of representational services to any business entity located in the taxable territory; and services supplied by an arbitral Tribunal to a business entity.

The applicant sought clarification on the questions whether Nirma would be eligible for claiming benefit of the exemption for legal services as provided in Sr. No.45 of the Notification No.12/2017-Central Tax (Rate) dated 28th June, 2017, as amended from time to time in respect of procurement of legal services?

The other issue raised was whether services provided by Nirma are exempted under S. No. 4 of Notification No.12/2017-Central Tax (Rate)?

Further, whether Nirma is required to be registered as a Deductor under GST as per the provision of Section 24 of the CGST Act?

The coram consisting of Sanjay Saxena and Mohit Agarwal observed that the CBEC vide Circular clarified that the provisions of Section 51 of the CGST Act, are applicable to only such authority or board or any other body whether set up by an Act of Parliament or a State Legislature or established by any Government in which fifty one percent or more participation by way of equity or control, is with the Government.

The AAR noted that Nirma University is set up by the Nirma University Act passed by the Gujarat State Legislature, in which the Government is having zero percent participation by way of equity or control. Hence, the applicant does not fall under this category of specified person for the purpose of Section 51 of the CGST Act, 2017.

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