Fact: J. J. College of Architecture consultancy cell (“the applicant”) was formed as per the guidelines of the council of Architecture which is statutory body under the act of Parliament and University of Mumbai. The applicant provides services to only to Government bodies, State corporations and PSUs in relation to comprehensive architecture services that include project design, structural design, MEP design, drawings, study reports, etc. The applicant has entered into an agreement with Municipal Corporation of Grater Mumbai (MCGM) for an upcoming project of establishment & development of ‘textile Museum’ in Mumbai where the applicant has to provide comprehensive Architecture service and project management service that includes architecture service and MEP design, reviewing tender document for inviting contractors, site supervision and certifying bills of contractors paid by MCGM.
Issue Involved: Whether the applicant shall charge GST on the consultancy services rendered to Municipal Corporation of Greater Mumbai (MCGM) for an upcoming project of establishment & development of textile museum in Mumbai?
Applicant’s Interpretation of Law: The applicant contended that as per the provision of GST law, the GST is applicable on supply of goods/services. The consultancy services provided to MCGM is a supply for consideration. However, there is exemption provided via notification no. 12/2017- Central tax (rate) dated June 28, 2017 in respect of services provided to central government, state government or union authority or local authority or a government authority. Further the entry provides exemption from payment of taxes on pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to central government, state government or union authority or local authority or a government authority by way of any activity in relation to any function entrusted to panchayat under article 243G of the constitution or in relation to any function entrusted to a municipality under article 243W of the constitution.
Held: The Hon’ble AAR of Maharashtra vide Advance Ruling NO.GST-ARA-54/2018-19/B-128, dated October 12, 2018 stated that documentary evidences and submissions made by the applicant in respect of registration under Stamp Act as Works Contract Agreement, we are constrained to find that the services being provided by the applicant to MCGM are in the nature of Works Contract Services and therefore they would in no way be eligible for exemption under Sr. No. 3 of Notification No. 12/2017-CT (Rate) dated June 28, 2018, in respect of pure services. Hence, services provided by the applicant shall charge GST on consultancy services rendered to MCGM for project of establishment and development of textile museum in Mumbai.
Citation: [2018] 100 taxmann.com 312 (AAR – MAHARASHTRA)