No GST on Technical Services for Water Distribution Networks Provided to PHED: AAR [Read Order]

The West Bengal Authority for Advance Ruling (AAR) ruled that no Goods and Services Tax (GST) is payable on technical services provided for water distribution networks to the Public Health Engineering Department (PHED), Government of West Bengal.

The applicant, Rimita Mukherjee, provides the design and development of web and mobile-based applications, GIS mapping and analysis, digital or analog surveying, data management, and technical consultancy related to water distribution networks. The services are rendered under work orders issued by PHED for projects under the Jal Jeevan Mission (JJM), which provides safe and clean drinking water to every household in West Bengal.

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The applicant’s counsel argued that the services qualify as pure services, as they do not involve the supply of goods, and are provided to a government department. These services are related to water supply, a function specifically entrusted to Panchayats under Article 243G and Municipalities under Article 243W of the Indian Constitution. So, the supply should be exempt from GST under the notification's provisions.

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The bench of Dr. Tanisha Dutta and Joyjit Banik confirmed that the services provided by the applicant do not involve the supply of goods and are directly related to drinking water supply, a core function of local governance under the Eleventh and Twelfth Schedules of the Constitution of India.

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As per Notification No. 12/2017, pure services provided to the government for functions entrusted to Panchayats or Municipalities are exempt from GST. The applicant’s services fall within this category so, the AAR ruled that the supply is not subject to GST.

The AAR stated that services provided to the PHED, including its Nadia and Burdwan Divisions, are eligible for GST exemption, as they support water distribution networks and infrastructure development under a government mandate. Therefore, no GST is applicable on these services.

To Read the full text of the Order CLICK HERE

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