No GST on Security Service and Supply of Manpower to Government Departments: AAR [Read Order]

supply of manpower - AAR - Taxscan

The Gujarat Authority of Advance ruling (AAR) ruled that the applicant is eligible to claim exemption benefit for the supply of manpower, security service provided to Central Government, State Government, Local Authorities, Governmental Authorities, Government Entities, subject to the condition that the services provided in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India.

The applicant, M/s. A. B. Enterprise is a partnership firm registered under GST and is engaged in the business of providing manpower services to Government as well as Non-Government entities and has been providing such services for the past several years; that the aforesaid supply of services includes manpower supply for housekeeping, cleaning, security, data entry operators, etc. at various positions in such Government departments.

The firm has been awarded a contract from various Government departments on successful bidding of tenders floated by respective Government departments/organizations; that they provide works contract service as well which is supplied along with goods; that however in case of manpower supply service, supply is only for service and there is no supply of goods along with it in the execution of such manpower supply service contract; that after the introduction of GST.

The applicant sought the advance ruling on the issue Whether the applicant is eligible to claim exemption benefit under Sr.No.3 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 for Pure services (supply of manpower, security service) provided to Central Government, State Government, Local Authorities, Governmental Authorities, Government Entities as submitted in Annexure-A to the application.

The Authority consisting of Sanjay Saxena and Mohit Agarwal ruled that the applicant is eligible to claim exemption benefit under Sr. No.3 of Notification No.12/2017-Central Tax (Rate) dated June 28, 2017, for pure services (supply of manpower, security service) provided to Central Government, State Government, Local Authorities, Governmental Authorities, Government Entities, subject to the condition that the services provided to these entities are provided by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India.

“Therefore, the exemption sought by the applicant will depend upon the nature of services provided by them in terms of specific contracts entered by them with respective service recipients,” the AAR further ruled.

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