IIM is liable to deduct tax at source under GST from payment made or credited to its suppliers being a Govt. Entity: AAR

Case Details: Authority for Advance Rulings, Tamil Nadu Indian Institute of Management, In re - [2021] 129 taxmann.com 420 (AAR - TAMILNADU)

Judiciary and Counsel Details

• • Senthilvelavan B. and Kurinji Selvaan V.S., Member

Facts of the Case

The applicant was established under the Indian Institute of Management Act, 2017 (IIM Act). It was engaging suppliers to provide certain services like pure labour services and supply of composite services. It filed an application for advance ruling to determine whether it would be a treated as Government Entity under GST law and liable to deduct tax at source under section 51.

AAR Held

The Authority for Advance Ruling observed that the applicant was an educational institution established under Indian Institute of Management Act, 2017. It would be receiving more than 90 per cent of its funds from Central Government. Therefore, it would be treated as Government Entity under GST Law. Therefore, it was held that the applicant being a body set up by an Act of Parliament with more than 51 per cent participation by way of funding from Government would be liable to deduct tax at source from its suppliers under section 51 read with Notification No. 50/2018 – Central Tax, dated 13-9-2018.