The AAR, Maharashtra in the matter of M/s Meerabai Tukaram Borade [GST-ARA-96/2019-20/B-86 dated November 2, 2021] held that, services provided by M/s Meerabai Tukaram Borade (“the Applicant”) to Samaj Kalyan Department (“SKD”), Government of Maharashtra (“GOM”), for residential accommodation of underprivileged girls is not exempt as per the provisions of Notification No. 12/2017- Central Tax (Rate) dated June 28, 2017 (“Service Exemption Notification”):
|
SI No. |
Chapter | Description of Services | Rate |
Condition |
|
3 |
Chapter 99 |
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. |
Ni |
Nil |
The Applicant submitted that the supply is undertaken by her to SKD is exempt supply as per the above mentioned provision because it is supply of a pure services made to the department of GOM in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or Municipality under Article 243W of the Constitution.
The Hon’ble Maharashtra Authority for Advance Ruling (“MAAR”) held that though the Applicant is supplying pure services but has failed to satisfy that how her activities of providing residential accommodation to underprivileged girls is covered under Article 243G/243W of the Constitution.
Further held, that it is not possible to find whether the said services are supplied by the Applicant by way of an activity in relation to any function entrusted to a Panchayat under Article 243G/243W of the Constitution.
Held that, renting of immovable property services by the Applicant to GOM for under-privileged girl is not liable for exemption as per Service Exemption Notification.
Further, held that as the supply of service by the Applicant is not exempt supply, thus the TDS provision as per Section 51 of Central Goods and Services Tax Act, 2017 will also be applicable.
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