No GST on consultancy services provided to State Govt. entity for preparation of transport studies: AAR

Case Details: Maha Mumbai Metro (M3) Operation Corporation Ltd., In re - [2022] 137 taxmann.com 99 (AAR - MAHARASHTRA)

Judiciary and Counsel Details

• • Rajiv Magoo and T.R. Ramnani, Member

Facts of the Case

The appellant was engaged in providing consultancy services for preparation of transport studies to Mumbai Metropolitan Region Development Authority (MMRDA). The MMRDA is a body established by the Government of Maharashtra under MMRDA Act, 1974. The consideration is received by the applicant is in the form of reimbursement of expenses incurred. The applicant has filed an application for advance ruling to understand the GST applicability and rate (if applicable) on such reimbursement of expenses.

AAR Held

The AAR analysed Sl. No. 3 of Notification No. 12/2017 – Central Tax (Rate), dated 28-06-2017 which provides that Pure services provided to Government entity by way of any activity in relation to any such functions entrusted to Panchayat/Municipality under Article 243W/243G of the Constitution.

The AAR observed that the applicant is providing pure services as no goods have been supplied under the impugned arrangement. Further, it has also been observed by the AAR that MMRDA is a Government Entity as it is established by the State Government of Maharashtra with 100 percent participation by way of equity or control.

It was also observed by the AAR that the impugned pure services supplied by the applicant to MMRDA can be covered under clause (1) of the Twelfth Schedule of the Constitution of India, pertaining to article 243W of the Constitution (i.e. Urban planning including town planning).

Basis the above the AAR held that the consultancy services provided by the applicant would fall under SI. No. 3 of Notification No. 12/2017 – Central Tax (Rate), dated 28-06-2017 and the impugned reimbursement would not be liable to tax.

List of Cases Referred to

• • Tata Iron and Steel Co. Ltd. v. Union of India 2003 taxmann.com 1978 (SC) (para 2.5)
  • Habufa Meubelen B.V., In re [2018] 95 taxmann.com 120/68 GST 880 (AAR – Raj.) (para 2.9)
  • Union of India v. Intercontinental Consultants and Technocrats (P.) Ltd. [2018] 91 taxmann.com 67/66 GST 450 (SC) (para 2.10)
  • Amaravathi Metro Rail Corporation Ltd., In re [2018] 99 taxmann.com 104 (AAR – Andhra Pradesh) (para 2.17)
  • APITCO Ltd. v. CST [2012] 26 taxmann.com 213/37 STT 362 (SC) (para 2.23)
  • Bellary Nirmiti Kendra, In re [2021] 127 taxmann.com 644/87 GST 66 (AAR – Kar.) (para 2.24).