‘Consultancy Services’ for Preparation of Transport Studies such as Comprehensive Mobility Plan, etc. Exempt from GST: AAR [Read Order]

GST Exemption

The Andhra Pradesh Authority of Advance Rulings in an application filed by M/s. Amaravathi Metro Rail Corporation Ltd. (AMRCL) held that AMRCL is exempt from GST.

It was held that AMRCL is a ‘governmental authority’ under the relevant notification, ‘municipality’ under Article 243W of the Constitution and hence exempt from GST.

The issue before the Authority was whether the applicant is a government authority according to Notification No. 12/ 2017 dated June 28th, 2017 read with Notification No. 32/ 2017 dated October 13th, 2017. The second issue was whether the consultancy services for preparation of transport studies such as comprehensive mobility plan, transit oriented development plan, NMT plan and consultancy services of transaction advisors comes within the purview of the functions of ‘Municipality’ under Article 243W read with Twelfth Schedule to the Constitution of India to fall within the purview of the aforesaid exemption notification.

An analysis of the definition of ‘Government’ as per the notification dated June 28th, 2017 was examined. According to the definition, the term has the same meaning as is under Explanation to Clause (16) of Section 2 of the Integrated GST. Further, according to the meaning of ‘governmental authority’ under the same provision means an authority or a board set up or established by an Act of Parliament or State Legislature or Government with 90% or more participation by way of equity or control to carry out any function entrusted to a municipality under Article 243W of the Constitution.

The bench constituting of members: Sri. J.V.M. Sarma and Sri. Amresh Kumar observed that AMRCL is a special purpose vehicle set up and fully owned by Government of Andhra Pradesh for Vijaywada Metro Rail Corporation and hence is a ‘Government Authority’ as per the above Notification.

To answer the second issue with respect to examination of whether ‘consultancy services’ for preparation of transport studies such as Comprehensive Mobility plan, Transit Oriented Development Plan, Integrated Public Transport Plan and Non Motorized transport Plan come within the purview of functions of ‘Municipality’ enlisted under Article 243W read with Twelfth Schedule to the Constitution of India under head 2 i.e. ‘Urban planning including town planning’. Again, functions performed by AMRCL are also covered under the head ‘Public Amenities’.

The bench answering the second issue held AMRCL to be a ‘Municipality’ under Article 243W of the Constitution and is hence exempt from GST.

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