Page 130 - GSTL_20th August 2020_Vol 39_Part 3

344 GST LAW TIMES [ Vol. 39
The Board of the applicant i.e., “Sri Satya Sai Water Supply Project
Board” consists of 9 Members, out of which 7 are officers/Employees of the Gov-
ernment of Andhra Pradesh that qualifies for 77% of Government control falling
short of the designated 90% as required by the Act. Even the cost of the operation
and maintenance of the water supply scheme is contributed at a ratio of 70% by
the State Government, while 30% of the cost is being borne by the applicant from
the water charges collected from the users. In the instant case the applicant falls
short of the qualifying mark of 90% in terms of equity or control. Hence the ap-
plicant does not fit in the category of “Governmental authority”.
Thus availment of exemption for the services received by the applicant
by virtue of Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-
2017 does not arise in this context.
Now we look into the issue of taxability of the services procured by the
applicant from its Contractor M/s. Larsen & Toubro Limited, Water Supply &
Distribution Business Unit, Water & Effluent Treatment IC. In light of the facts of
the case as submitted by the applicant the Contractor is responsible for the “Op-
eration and Maintenance” of the plant such as engaging of labour, supervisors to
oversee the labour and managers for overall supervision along with amenities,
tools & tackles provided for all the above personnel like vehicle, office establish-
ment etc., while the applicant would ensure uninterrupted power supply and
supply of material/spares as and when necessitated by the Contractor. Thus the
services provided by the Contractor are pure services of “Operation and Mainte-
nance” of plant devoid of any supply of material or goods in the due process.
The services under question fall under Sl. No. 25, Heading 9987 “Maintenance
repair and installation (except construction) Services” attracting tax rate of 18%
(CGST 9% + SGST 9%) under Notification No. 11/2017-Central Tax (Rate), dated
28-6-2017.
RULING
Question 1 : Whether the applicant qualifies as a ‘Governmental Au-
thority’ under the Act and whether the services availed by
it are exempt from the GST by virtue of Entry 3 in Notifica-
tion No. 12/2017-C.T. (Rate), dated 28-6-2017?
Answer 1 : The applicant does not qualify for Governmental Authori-
ty under the Act and hence services procured by it are not
exempt but taxable as explained above.
Question 2 : Whether the Applicant is not liable to remit any GST to its
suppliers for any services it procures by virtue of its activi-
ties of supplying water for domestic purposes?
Answer 2 : The services procured by the applicant fall under Sl. No.
25, Heading 9987 “Maintenance, repair and installation
(except construction) Services” attracting tax rate of 18%
(CGST 9% + SGST 9%) under Notification No. 11/2017-
Central Tax (Rate), dated 28-6-2017.

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GST LAW TIMES  20th August 2020  130