Consulting Services provided by GITEC-IGIP to Greater Chennai Corporation is exempted from GST: AAR [Read Order]

The Authority for Advance Rulings (AAR), Chennai bench has held that the Pure Services provided by the applicant by way of rendering Consulting Services for Programme Management and Accompanying Measures for implementation of Integrated Strom Water Drain for M1 & M2 Components of Kovalam Basin in the extended area of Greater Chennai Corporation is exempted from GST.

The bench comprising Ms. K Latha (Member SGST) and Mr. T G Venkatesh (Member CGST) has held that the GCC being a Municipal Corporation, constituted by the State, is a “Local authority” by the definition of ‘local authority’ at S.2(69) of the GST Act and the services rendered by the applicants are the services rendered to a local authority.

The bench observed that the applicant extends technical expertise in documentation, supervision, etc of Construction and Maintenance of ‘Storm Water Drain’ in the M1 and M2 areas as marked in the Contract Document. From the `Overall Programme Concept’ found in the contract, the project is undertaken as a part of the Programme “Sustainable Urban Infrastructure Development” in India; and this commitment, to be implemented with the support of a Programme Management Consultant(PMC) shall be used to finance stormwater management measures for Kovalam Basin and Accompanying Measures(AM) to support the sustainability of the Programme.

“Thus, it is established that the project is undertaken to improve the ‘urban Infrastructure of the Chennai City’. ‘Urban Planning’ is one of the activities stipulated under the ‘Twelfth Schedule’ of the Constitution. Therefore, the activities of the applicant are ‘in relation to’ the activity of ‘Urban Planning’, an activity under Article 243W of the Constitution,” the bench said.

While concluding, the bench held that “in this case the applicants are providing “Pure Services”, by way of rendering Consulting Services for Programme Management and Accompanying Measures for implementation of Integrated Strom Water Drain for M1 & M2 Components of Kovalam Basin in the extended area of Greater Chennai Corporation and the same is supplied to GCC, who is a “Local Authority”, represented by the Superintending Engineer, Strom Water Drain Department, Greater Chennai Corporation, Chennai. Also, the services are in relation to Entry No.1 of the List as per the Twelfth Schedule under Article 243W of the Constitution of India i.e., Urban Planning including Town Planning. In view of the above facts, the applicant is eligible for the exemption claimed for such pure services.”