DPR, PMCS Services Provided under SUDA under Article 243G and 243W are Pure Services, Exempted From GST: AAR [Read Order]

The Lucknow Authority for Advance Ruling (AAR) has held that the Detailed Project Report Service (DPR) and Project Management Consultancy services (PMCS) provided under State Urban Development Agency (SUDA) contracts as per Article 243G and 243W of the Constitution of India were pure services exempted from Goods and Service Tax (GST).

Pradhan Mantri Awas Yojana - Urban (PMAY-U), a flagship Mission of Government of India, applicant Rudrabhishek Enterprises Limited was shortlisted as an agency for "Preparation of Detailed Project Report" and providing "Project Management Consultancy Service". SUDA, entered into agreement with the applicant.

The applicant has sought advance ruling as to whether the Project Development Service (Detailed Project Report Service (DPR)) and Project Management Consultancy services (PMCS) provided by the applicant to the recipient under the Contract from State Urban Development Agency (SUDA) under the Contract for PMAY-U were exempted from GST or not.

Pankaj Kumar Shukla, who appeared on behalf of the applicant submitted that service provided by sub-contractor regarding DPR and PMS to main contractor would be exempted because such services stood exempted as long as they were provided to SUDA under PMAY either by main contractor or by subcontractor.

The authority of Rajendra Kumar (Member (Central Tax)) and Harilal Prajapati (Member (State Tax)) observed that,  No. 3 of Notification No. 12/2017-CT (Rate) dated 28.06.2017 had exempted "Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution" as amended by notification no. 16/2021-central tax (rate) w.e.f.1.1.2022.

For qualifying the exemption under the said entry, it was essential that specified services were provided to the Central Government, State Government or Union territory or local authority or a Governmental authority and there was no condition in the notification that the said services were provided directly to the Central Government, State Government or Union territory or local authority or a Governmental authority.

The AAR relying upon these observations held that the applicant was entitled for exemption if the specified services were provided to SUDA under sub-contract with the main contractor.

To Read the full text of the Order CLICK HERE

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