The Gujarat Authority of Advance Ruling (AAR) has held that the Architectural Consultancy Service provided by Surat Municipal Corporation (SMC) is eligible for Goods and Service Tax.
The aforesaid application was filed by the applicant Ajit bhabhubai Jariwala, engaged in providing professional consulting services vrz architecture, engineering (MEPF), planning, urban design, landscape, sustainability, research and art, building design, interior design, surveying, environmental sciences, project management and project economics.
The applicant has been granted work to provide architectural consultancy service to Surat Municipal Corporation regarding the project namely SMIMER Hospital & College Campus & further to prepare architectural and working drawings as required for the construction of the project.
The advance ruling was sought by on the issue of whether the ‘Architectural Consultancy Service’ provided by the applicant to Surat Municipal Corporation for construction of SMIMER Hospital & College Campus is eligible for Goods and Services Tax exemption.
Vedraj Agarwal and Ajit B Jariwala appeared on behalf of the applicant.
Before the bench, the applicant submitted that the services rendered to SMC would fall within entry no. 21 of notification No. 11/2017-CT(Rate) and would be taxable @ l8%.
However SMC is of the view that the project to build the SMIMER Hospital and College being covered under the 12th schedule of the Article 243W of the Constitution of India, would be exempted in terms of entry no 3 of notification No. 12/2017-CT (Rate).
The Authority observed that the task entrusted as enumerated in the order clearly depicted that it is a pure service that the applicant is supposed to render.
Article 243W of the Constitution of lndia deals with powers, authority and responsibilities of Municipalities.
Municipalities have been further entrusted the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule
Further, the authority determined that the pure services provided to the local authority by way of any activity in relation to a function entrusted to a Municipality under article 243 W of the Constitution of India is exempt from GST.
Therefore, the supply by the applicant to SMC being a pure service meets the criterion set out in the Notification No. 12/2017-CT(Rate) dated 28.6.2017 and thus exempted from Goods and Services Tax.
After considering facts of the case, the two bench member of authority Miland Kavatkar and Amit Kumar Mishra ruled that the “ ‘Architectural Consultancy Service’ provided by the applicant to Surat Municipal Corporation [SMC] for construction of SMIMER Hospital & College Campus is covered under entry no. 3 of notification No. 12/2017-Central (Rate) dated 28.6.2017 & thus is exempt from GST” Keywords: Architectural consultancy service, Surat Municipal Corporation, GST exemption, AAR, Goods and Service Tax
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