The West Bengal Bench of Authority for Advance Ruling ( AAR ) held that GST cannot be levied on Comprehensive Water Supply Planning Services.
In this case, the applicant is Shyama Chatterjee, who carries out business under the name Setech India. The applicant had been awarded contracts from various local bodies/municipalities to conduct surveys, design, sketch, estimate, and prepare comprehensive plans for their water supply schemes.
Get a Copy of GST Manual (Acts & Rules), Click here
The applicant had approached the Authority for Advance Ruling ( AAR ) regarding whether the above-mentioned services provided by the applicant fall under pure services and would be exempt from Goods and Service Tax ( GST ).
Thus, the issue, in this case, is whether the services provided by the applicant are applicable for exemption from GST and whether the services provided by the applicant are related to functions assigned to a panchayat under Article 243G or a municipality under Article 243W of the Indian Constitution.
The applicant had submitted before the AAR that the services provided by him towards survey, design, drawing, estimate, and preparation of detailed reports in respect of water supply schemes in rural or municipal areas don’t involve any kind of supply of goods.
Get a Copy of GST Manual (Acts & Rules), Click here
The bench observed that while referring to the 11th and 12th Schedule of the Indian Constitution, the functions entrusted to a panchayat or municipality include functions like drinking water or water supply for domestic, industrial, and commercial purposes.
The bench further was of the observation that the applicant’s services for surveying, designing, drawing, estimating, and preparing comprehensive plans for water supply projects fall under the Eleventh and/or Twelfth Schedule in relation to functions entrusted to a panchayat under article 243G and/or to a municipality under article 243W of the Indian Constitution.
Get a Copy of GST Manual (Acts & Rules), Click here
The bench, comprising Dr Tanisha Dutta ( Joint Commissioner, CGST & CX ) and Joyjit Banik ( Additional Commissioner), held that the applicant is excluded from paying taxes on supplies made for the survey, design, drawing, estimate, and preparation of a comprehensive plan related to water supply schemes to the state government and the local authorities.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
