{"id":9696,"date":"2020-05-29T20:07:13","date_gmt":"2020-05-29T14:37:13","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=9696"},"modified":"2020-05-29T20:14:04","modified_gmt":"2020-05-29T14:44:04","slug":"authority-of-advance-ruling-on-gst-applicability-2020","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/authority-of-advance-ruling-on-gst-applicability-2020\/","title":{"rendered":"GST Applicability on Works Contract for NCBS &#038; Food Services for Exempted Institutions: AAR"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Consumption of goods and services is intended by GST based taxes. Starting from manufacture up to final consumption with credit of taxes paid at previous stages available as set off, it is projected to be levied at all the right phases. In an outer layer, the burden of tax is to be tolerated by the final consumer, and in which only value addition will be taxed. Deprived of <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>GST registration<\/strong><\/a>, a person can neither assert any input tax credit of tax paid by him nor save\/collect tax from his customers.<\/p>\n\n\n\n<p>Well, are you aware that 18% GST is applicable on Works Contract for <strong>National Centre for Biological Sciences (NCBS<\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/National_Centre_for_Biological_Sciences\"><strong>[1]<\/strong><\/a><\/sup><strong>)<\/strong> held by Authority of Advance Ruling (AAR)? In addition, do you know that all Supply Facilities of Food and Drinks to Educational Institutions are exempted from GST? Yes. This blog will articulate the recently ruled observation made by Authority of Advance Ruling (AAR), Karnataka upon the GST applicability on the said purposes.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">GST Applicability on Works\nContract for National Centre for Biological Sciences: 18%<\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" width=\"632\" height=\"362\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/05\/image-156.png\" alt=\"GST Applicability on Works Contract\" class=\"wp-image-9697\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/05\/image-156.png 632w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/05\/image-156-300x172.png 300w\" sizes=\"(max-width: 632px) 100vw, 632px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Authority Held<strong><\/strong><\/h3>\n\n\n\n<ul><li>In consonance with the GST applicability, the works contract service delivered to the (NCBS) National\nCentre for Biological Science is liable to be taxed 9% under (CGST) Central\nGoods and Service Tax and 9% under Karnataka Goods and Service Tax (KGST). It\nhas been ruled by The Authority of Advance Ruling (AAR), Karnataka.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Facts and\nContentions<\/h3>\n\n\n\n<ul><li><strong>M\/s Homebale Construction and Estates Private Ltd<\/strong>, the Applicant in the case, is a Private Limited Company incorporated under the Companies Act, 1956. For the creation of Hostel building at <strong>NCBS Campus in Bangalore<\/strong>, they have arrived into a works contract agreement with NCBS-National Centre for Biological Sciences.<\/li><li>According to the parameters assigned for GST applicability via \u2018<strong>Notification No 24\/2017 Central Tax (Rate) dated 21-09-2017<\/strong>\u2019, the applicant has sought after advance ruling on the subject issue whether an applicant should charge <strong>GST @12% for service delivered<\/strong> to National Centre for Biological Sciences or not.<\/li><li>It is a crucial point to be noted, that this institute is not recognized to carry out a function entrusted by the Government. Therefore, the authority has pointed and remarked upon it saying that the NCR is <strong>not protected<\/strong> under the definition of a <strong>\u201cGovernment Entity<\/strong>,\u201d and cannot be articulated upon it.<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/job-work-under-gst\/\">\nA Complete Outlook on Job Work under GST Regime\n<\/a><\/mark><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Remarks from\nBench Bar <\/h3>\n\n\n\n<ul><li>After due\ndeliberations, discussions and fair trials, it was held by M.P. Ravi Prasad and\nMashud Ur Rehman Faruqui that GST applicability for the work contract service delivered\nby the applicant to the National Centre for Biological Science (NCBS) is liable\nto be taxed at the rate <strong>of 9% under\nCentral Goods and Service Tax (CGST), and 9% under Karnataka Goods and Service\nTax (KGST)<\/strong>. <\/li><li>The authority for this ruling consisted of members M.P. Ravi Prasad and Mashud Ur Rehman Faruqui. It has been pronounced that \u201cNCBS is neither recognized by the government nor is set up by State Government or an Act of Parliament. As well, M.P. Ravi Prasad opines that <strong>Government does not have more than 90% control over it<\/strong>, because the council which manages this institute has only four members appointed by the Government. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">GST Applicability on Supply services of Food and Drinks to\nEducational Institutions: Held Exempted<\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" width=\"653\" height=\"398\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/05\/image-157.png\" alt=\"GST Applicability on Supply services of Food and Drinks\" class=\"wp-image-9699\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/05\/image-157.png 653w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/05\/image-157-300x183.png 300w\" sizes=\"(max-width: 653px) 100vw, 653px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Authority Held<\/h3>\n\n\n\n<ul><li>It was held that\nthe <strong>supply facilities <\/strong>of Food and\nDrinks to <strong>educational institutions <\/strong>are\n<strong>exempted<\/strong> from State Goods and\nService Tax (SGST) and Central Goods and Service Tax (CGST). It was ruled by the\nAuthority of Advance Ruling (AAR), Karnataka.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Facts and\nContentions<\/h3>\n\n\n\n<ul><li>According to the\nGST applicability pronouncements \u201c<strong>SI.No.66\nof the Notification No.12\/2017 Central Tax (Rate) dated 28th June 2017<\/strong>\u201d,\nM\/s Mahalakshmi Mahila Sangha which is the applicant in the case was involved\nin providing catering services to educational institutions supported by State\/\nCentral Union territories which are under exempted services. <\/li><li>All over again, with\nthe virtue of GST applicability under <strong>Serial\nNo. 66 of the Notification No. 12\/2017-Central Tax (Rate),<\/strong> the applicant\nsought improved\/advanced ruling on the issue of whether activities of delivering\ncatering services to educational institutions under exempted service. <\/li><li>It was also\ncontended that <strong>TDS under GST is\napplicable only for taxable supply contracts according to the Circular\n65\/39\/2018<\/strong>. Therefore, the applicant is meant to be exempted as the service\nprovider. It was also mentioned that TDS is not applicable to its services (HSN\nCode 9992).<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Remarks from\nBench Bar<\/h3>\n\n\n\n<ul><li>M.P. Ravi Prasad\nand Mashud Ur Rehman Faruqui were the Authorities consisting of members who ruled\nthat, the supply of services made by the applicant in the form of supply of\nfood and drinks to the educational institutions is covered under entry no.66 of\nNotification (12\/2017) Ng. FD 48 CSL 2017 and entry no. 66 of Notification No.\n12\/2017- Central Tax (Rate). After due deliberations, these services are hence <strong>exempted from CGST and SGST. <\/strong><\/li><li>It was also noted\nby the AAR, that under section 51 of the CGST Act and section 51 of KGST Act,\n\u201cthe amount received for such exempted service as sheltered under para 1 above\nis not accountable for tax deduction at source\u201d <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion <\/h2>\n\n\n\n<p style=\"text-align:left\">The greater test may essentially be around GST applicability for the institutions. Our <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a> group will be at your disposal if you want expert advice on any aspect of <a href=\"https:\/\/corpbiz.io\/learning\/restrictions-on-the-charitable-trust\/\"><strong>Charitable Trust<\/strong><\/a> issues. We will help you to ensure complete compliances concerning all the issues related to GST applicability-based as per your desired activities, ensuring the fruitful and well-timed completion of your work.\u00a0<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/elucidation-on-gst-refund-issues\/\">Elucidation on GST Refund Issues \u2013 Recent Updates\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Consumption of goods and services is intended by GST based taxes. Starting from manufacture up to final consumption with credit of taxes paid at previous stages available as set off, it is projected to be levied at all the right phases. In an outer layer, the burden of tax is to be tolerated by the [&hellip;]<\/p>\n","protected":false},"author":20,"featured_media":9703,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16,153],"tags":[609],"acf":{"service_id":"132"},"authorName":"Archita Bhattacharjee","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/WhatsApp-Image-2020-03-18-at-11.26.19-AM-1.jpeg","authorDescription":"Archita Bhattacharjee is working as Legal Analyst (Team Lead, Research &amp; Development) at Corpbiz and has proving experience about 2 years as Corporate Legal Researcher in law firms as well as Rajya Sabha and authors in diverse publications. She has refined her skills by representing India in Paris, France and the University of Leiden over implications of International Humanitarian and Criminal Law being certified member of many Legal Centers.","postViews":3987,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/9696"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=9696"}],"version-history":[{"count":12,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/9696\/revisions"}],"predecessor-version":[{"id":9713,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/9696\/revisions\/9713"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/9703"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=9696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=9696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=9696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}