The Central Board of Indirect Taxes & Customs ( CBIC ), through the Circular No. 245/02/2025-GST clarified that GST is applicable on the services provided by facility management agency to MCD, Delhi HQ for upkeep of its head quarter building at applicable rates as these services are not covered under the scope of entry at Sr. No. 3A of the notification No. 12/2017-CTR dated 28.06.2017.
A request for clarification about the GST’s applicability to facilities management services rendered to MCD Headquarters in New Delhi has been received. The facility management organization provides MCD with services including housekeeping, horticulture, furniture maintenance, and civil maintenance for the upkeep of their workplace. MCD has requested clarification over whether the services they receive are GST-exempt under Sr. No.3A of the notification No. 12/2017-CTR dated June 28, 2017.
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The aforementioned entry at Sr. No. 3A of notification No. 12/2017-CTR dated 28.06.2017 exempts composite supplies of goods and services when the value of the supply of goods does not exceed 25% of the value of the composite supply given to the government or local authority through any activity related to any function entrusted to a municipality under Article 243W of the Indian Constitution or to any function entrusted to a panchayat under Article 243G of the Indian Constitution.
MCD receives facilities management services, including gardening, civil maintenance, furniture maintenance, and housekeeping, to maintain their office. These services are not provided in connection with carrying out any duties assigned to a municipality by Article 243W of the Indian Constitution. Such services are not included by the scope of entry at Sr. No. 3A of the notification No. 12/2017-CTR dated 28.06.2017, the board clarified. The Board clarified that GST is applicable on the services provided by facility management agency to MCD, Delhi HQ for upkeep of its head quarter building at applicable rates as these services are not covered under the scope of entry at Sr. No. 3A of the notification No. 12/2017-CTR dated 28.06.2017.
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