The Authority for Advance Ruling (AAR), Chhattisgarh ruled that Services of survey and Detailed Project Report (DPR) for water supply schemes for Panchayat/ Municipalities under Jal Jeevan Mission are pure services eligible for GST Exemption.
The applicant, M/s Aarav Consultancy Services Pvt Ltd sought Advance Ruling under Section 98 of the Chhattisgarh GST Act, 2017, regarding GST exemption on the services of surveyand preparation of detailed project report (DPR) for water supply schemes forPanchayats/Municipalities under JalJeevan Mission under Notification Number 12/2017-Central Tax (Rate) New Delhi, dated 28th June2017 and subsequentamendments (SL. No. 3: Pure Services) and applicability of 2% TDS deduction onthe payments made with regard to above services.
The applicant has been working for preparation of Detailed Project Report of water supply schemes of Gram Panchayats in different District of Chhattisgarh State under Jal Jeevan Mission through PHE Department, Chhattisgarh.
The applicants contented that the scope of services as mentioned above is a Pure Services case, since no supply of materials or construction activities involve in our scope of work and hence eligible for exemption vide Notification No.12/2017- Central Tax (Rate) New Delhi, dated 28th June, 2017 and subsequent amendments.
The applicant further contended that they are filing this advance ruling application to get the clarification on GST exemption as per the COI vide Notification No. 12/2017- Central Tax (Rate) New Delhi, dated 28th June, 2017 and subsequent amendments and that as per Sl. No. 3 of the said notification, GST rate is nil on “Pure Services”.
In the notification it states that the 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.”
A Two Member Bench of the Authority comprising Sonal K. Mishra, Joint Commissioner and Rajesh Kumar Singh, Additional Commissioner, observed that “The services of survey and preparation of detailed project report (DPR) for water supply schemes for Panchayats/Municipalities under Jal Jeevan Mission through Public Health Engineering Department, Government of Chhattisgarh provided by the applicant, M/s Aarav Consultancy Services Pvt Ltd. Raipur are eligible for exemption from CST as provided under Sr. 3 of Notification Number 12/2017-Central Tax (Rate) New Delhi, being pure services.”
The Bench also noted that “No deduction of TDS is warranted in respect of payment received byM/s Aarav Consultancy Services Pvt. Ltd, Raipur, the applicant againstabove services rendered by them which are exempted as per principal Notification No. 12/2017 — Central Tax (Rate) dated 28th June, 2017 asamended.”
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