The Telangana Authority of Advance Ruling (AAR) ruled that the GST is payable on e-procurement services provided to the Government.
The applicant, Telangana State Technology Services Limited (TSTSL) Telangana State Public Sector Undertaking and TSTSL is a Service Agency to the Telangana Government and its Departments relating to Information Technology and its related services.
The applicant has sought the advance ruling on the issue of whether the e-Procurement transaction fee collected on behalf of ITE&C Department of Telangana State Government towards online tenders’ results in a supply of goods or services or both, within the meaning of supply as defined. Whether the Tax liability arises on e-procurement transaction fee collected on behalf of the State Government Department i.e., IT E&C department. Whether these services made by the State Government Department falls under Entry No.6 of exemption of Notification No. 12/2017- Central Tax (Rate) Dated 28th June 2017.
It is the opinion of the applicant that such services provided by him fall under Entry 6 of Notification No. 12/2017 dated 28.06.2017 and therefore are exempt from any tax under GST.
The AAR noted that Services by the Central Government, State Government, Union territory or local authority excluding Services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than the Central Government, State Government, Union territory; Services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; Transport of goods or passengers; or Any service, other than services covered under entries (a) to (c) above, provided to business entities.
The coram of additional Commissioner (Central Tax), B. Raghu Kiran, and Additional Commissioner (State Tax), S.V. Kasi Visweswar Rao ruled that the applicant is providing services to the Government. Therefore the services provided by the applicant to the Government are not exempt under this Notification. Further, the services provided by the applicant on behalf of the Government to business entities are covered by the exception to the above entry, therefore such services also are not exempt.
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