THE MADHYA PRADESH APPELLATE AUTHORITY FOR ADVANCE RULING

OFFICE OF THE COMMISSIONER, COMMERCIAL TAX, MOTI BUNGLOW,

MAHATMA GANDHI MARG, INDORE (M.P.) - 452007

BEFORE THE BENCH OF

(1) Shri V. K. Saxena, MEMBER

(2) Shri RAGHWENDRA KUMAR SINGH, MEMBER

PROCEEDINGS

(Under section 101 of the Central Goods and Services Tax Act, 2017 and the

Madhya Pradesh Goods and Services Tax Act, 2017)

1. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MPGST Act are similar except for certain specific provisions. Therefore, unless a specific mention is made to such dissimilar provisions, a reference to the CGST Act would mean a reference to the similar provisions under the MPGST Act and vice-versa.

2. The present appeal has been filed under section 100 of the Central Goods and Service Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017 [hereinafter also referred to as "the CGST Act and MPGST Act"] by DIRECTORATE OF SKILL DEVELOPMENT, DEPARTMENT OF TECHNICAL EDUCATION SKILL DEVELOPMENT AND EMPLOYMENT, GOVT. OF MADHYA PRADESH . (hereinafter also referred to as the "appellant") against the order of Authority of Advance Ruling No. 10/2019/AAR /R-28/23 dated 18.07.2019.

1. BRIEF FACTS OF THE CASE

1. Appellant having their registered office at Global Skill Park ITI Building, Raisen Road, Govindpura, Bhopal, Madhya Pradesh is a part of State Government and has not taken registration under GST law.

2. The project for the Establishment of Center for Occupational Skills Acquisition within the Global Skills Park (hereinafter referred as GSP) in Bhopal, Madhya Pradesh was given to Directorate of Skill Development, Department of Technical Education, Skill Development & Employment (DoSD), Government of Madhya Pradesh.

3. The said Project is to assist the Government of Madhya Pradesh (GOMP) in transforming its technical and vocational education and training (TVET) system to create a skilled workforce that meets the evolving development needs of the State.

4. The project will establish a new advanced TVET institute of international standards to introduce a high quality, technology-oriented skills training for the State's priority sectors.

5. ITE Education Services Pte. Ltd, a Singapore based Consultancy Company (ITEES) having its registered office at ITE Headquarters, Blk A, A2-01, 2 Ang Mo Kio Drive Singapore 567720 as per agreement with Government of Madhya Pradesh is to provide Consulting Services to the Directorate of Skill Development for the said Project. An agreement was executed on 28.09.2018 between Directorate of Skill Development, Department of Technical Education, Skill Development & Employment, Government of Madhya Pradesh ("client") and ITE Education Services Pte. Ltd, the Singapore (ITEES) based Consultancy Company.

6. The total consideration has been decided to be USD $38,12,740/- which is to be paid in 11 installments. Appellant has reproduced the Clause 38.1 of the Agreement describing the consideration agreed between the parties.

7. The Contract price is US $ 38,12,740 (Inclusive of consultant country taxes). The lump sum amount is exclusive of provisional sums and contingency, which will be covered separately under the project, if required. The lump-sum amount is exclusive of all Indian taxes, levies and duties imposed by the applicable law. If the applicable law requires any Indian taxes, levies or duties to be paid, the consultant shall be entitled to invoice the client for a higher amount such that, after the payment/withholding of the relevant Indian taxes, levies or duties, the consultant shall receive the original amounts as stated in Appendix C of application.

8. The GSP will impart training to 10,000 students every year by trainers of international standard. The park will function on the spirit of 'With Industry-For Industry' and the trained students will be given placement in India and outside India at international level.

9. Some Key features of GSP are: -

a. International Training Method with On-Job trainings.

b. World Class Industrial machinery, tools, and equipment.

c. State of art classrooms, workshops and other facilities for students.

d. Partnership with Institute of Technical Education Singapore for course curriculum and teacher training.

To promote this objective skilled manpower is the need of the hour keeping this objective in mind the GSP is being established. There is no commercial or business motive behind establishment of this GSP. Hence the activity being performed by the DoSD is the execution of functions entrusted to the government hence it cannot be considered as business activity.

2, QUESTION RAISED BEFORE AUTHORITY FOR ADVANCE RULING (AAR)

Relevant question decided against appellant before AAR is as under: -

The Appellant desired to know, whether the services received by it from a provider of service located in a non-taxable territory would attract the provision of sec 5(3) read along with notification No. 10/2017 IGST(Rate) dated 28.06.2017. In other words, whether Applicant is liable to pay tax under reverse charge mechanism on the transaction mentioned above?

3. RULLING PRONOUNCED BY AAR

1. The Applicant shall be liable to pay IGST on import of Service under Reverse Charge Mechanism in terms of Notification No.l0/2017-IT(R).

2. This ruling is valid subject to provisions under section 103(2) until and unless declared void under section 104(1) of the GST Act.

4. QUESTION RAISED BEFORE THE APPELLATE AUTHOURITY FOR ADVANCE RULING (AAAR)

The Appellant desired to know, whether the services received by it from a provider of service located in a non-taxable territory would attract the provision of sec 5(3) read along with notification No. 10/2017 IGST(Rate) dated 28.06.2017. In other words, whether Appellant is liable to pay tax under reverse charge mechanism on the transaction mentioned above.

5. STATEMENT OF FACTS

1. The Government of Madhya Pradesh (GOMP) is implementing the Madhya Pradesh Skills Development Project (MPSDP) with the support of Asian Development Bank (ADB). The loan agreement was signed between ADB and Government of India and the project agreement was signed between ADB and GOMP on 3rd October 2018; and the loan became effective on 29 November 2018. The executing agency for the project is the Department of Technical Education, Skill Development, and Employment (DTESD&E), GOMP; and the implementing agency is the Directorate of Skill Development (DOSD) (hereinafter referred to as The Appellant'), having their registered office at Directorate of Skill Development, Ahead Rampur Square, Narmada Road, Jabalpur, Madhya Pradesh, India - 482002.

2. The MPSDP project aims to equip the men and women of Madhya Pradesh with mid- to advanced-level skills to meet emerging demands in the priority manufacturing and services sectors, as well as for advanced agricultural skills. To this end, the project will help GOMP transform the State's Technical Vocational Education and Training (TVET) system to build quality skilling opportunities. It will support the establishment of a new Global Skills Park (GSP) to impart advanced job-ready skills training of international standards. It will also modernize 10 ITIs across the state's 10 divisions t y upgrading training facilities and skills programs to deliver quality, industry-relevant training.

3. The project aims to train nearly 100,000 youth from underprivileged and economically weaker sections of the society over a period of 5 years.

4. In 2015, the Honorable Prime Minister of India visited Singapore ITE and reiterated the need of similar world class institutions in India. In 2016, the Honorable Chief Minister of Madhya Pradesh visited ITE Singapore and agreed upon a Memorandum of Understanding to establish a world class training center in MP. An MoU was signed between DTESD and ITE Education Services (ITEES) subsequently. ITEES is the international unit of ITE.

5. Institute of Technical Education (ITE), Singapore was established in 1992 as a statutory board under the Ministry of Education; Government of Singapore after the parliament approved and enacted the ITE Acts. The ITE Education Services Pte. Ltd. (ITEES), a wholly owned subsidiary of ITE, Singapore was set up in January 2003 with the objective of sharing ITE's expertise in Technical and Vocational Education & Training (TVET). ITEES having its registered office at ITE Headquarters, Blk A, A2-01, 2 Ang Mo Kio Drive, Singapore 567720.

6. Cabinet approval of GOMP was given vide order S No F-7/2018/42(2) Bhopal dated 28.07.2018 to engage ITEES as a single sourced consulting firm to support the implementation and operation of GSP. ADB vide its letter dated 16rh April 2018 supported the decision of single sourcing ITEES.

7. Contract between DoSD and ITEES was signed on 28.09.2018. The main scope of work is to advise and guide in the development of Global Skills Park (GSP), in campus design and infrastructure development, equipment design, laboratory and classroom design; curriculum adaptation, academic structuring, training of trainers; leadership development; and examination.

8. As per special conditions of the contract (SCC) 38.1 the total price of the contract is US$3,812,740 (inclusive of Consultant country taxes) i.e. Singapore taxes.

9. As per the loan and project agreement signed between ADB and GOI and GOMP respectively, there is a provision of direct payment in US Dollars from ADB to the consultant country. The facility is being used in the contract between DoSD and ITEES as per SCC 41.2

10. SCC 38.1 also states that incase a further tax liability arises in the client country i.e. India, the client is liable to pay those taxes over and above the contract amount. For example, any GST liability if arises, it has to be paid directly by DoSD to the concerned authorities without affecting the original contract amount committed to ITEES.

11. ITEES, Singapore shall raise invoices as per the applicable taxation laws of the Singapore against the services provided to the DoSD. Government of Madhya Pradesh in respect of the said services in Madhya Pradesh, India.

a. The consideration is to be paid in foreign currency (i.e. US Dollars) directly from Asian Development Bank, Manila, Philippines as per loan and project agreement with Government of India and Government of Madhya Pradesh, respectively.

b. The DoSD, Government of Madhya Pradesh is the recipient of services and ITEES, Singapore is the supplier of services.

c. The above services rendered by ITEES can be said to Import of services within the meaning of sec. 2(11) of IGST Act 2017.

12. Sec 5(3) of IGST Act, 2017 read along with Notification No. 10/2017 Integrated Tax (Rate) dated 28th June 2017 provide for the liability of tax to be paid on reverse charge mechanism in case of Import of service by any person located in the taxable territory. Once liability of reverse charge is imposed, all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

13. However, as per Entry no 10 of Notification No 9/2017 Integrated Tax (Rate) dated 28th June 2017, there has been an exemption on services received by the government from the provider of service located in a non-taxable territory. Extract from Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017

14 .The applicant filed an application u/s 97 of the Central Goods & Service Tax Act, 2017 and MP Goods & Services Tax Act, 2017 before the Authority for Advance Ruling to know whether the services received by it from a provider of service located in a non-taxable territory would attract the provision of sec 5(3) read along with Notification No 10/2017 IT(R) and Notification No.9/2017 IT(R). In other words, whether applicant is liable to pay tax under reverse charge mechanism on the transaction mentioned above?

15 .The Authority for Advance Ruling held that Applicant shall be liable to pay IGST on import of services under Reverse Charge Mechanism considering the fact that the exemption given under entry no. 10 of Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017 does not apply on services received by the applicant since the import of service is for the purpose of business or commerce.

6. GROUNDS OF APPLEAL

Ground No. 1: The activity performed by applicant is not business, and therefore the applicant is not liable for GST on reverse charge mechanism:

1. The ruling given u/s 98 of the Central Goods & Service Tax Act, 2017 and MP Goods & Service Tax Act, 2017 is bad-in-law and arbitrary, and liable to be quashed. The Ld. Authority has erred in considering the purpose of activities of the applicant as business purpose and not giving benefit of exemptions given in entry no.10 of Notification No.9/2017 - Integrated Tax (Rate) dated 28.06.2017. The activities of the applicant are in line with functions entrusted to Government in the Constitution of India. It is the social responsibility of the Government to impart Technical and Vocation training to create skilled workforce. There is no commercial or business motive in the set-up of this Global Skill Park rather the sole objective is to discharge the duties entrusted in the Constitution of India.

2. According to Section 2(17) of CGST Act "business" includes-

(a) Any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit;

(b) Any activity or transaction in connection with or incidental or ancillary to sub clause (a):

(c) Any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction;

(d) Supply or acquisition of goods including capital goods and services in connection with commencement or closure of business;

(e) Provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members;

(f) Admission, for a consideration, of persons to any premises;

(g) Services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation;

(h) Activities of a race club including by way of total or a license to book maker or activities of a licensed book maker in such club; and

(i) Any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities;

It is clear that the definition of business given in Sec 2(17) of the CGST Act is not explicit definition and is so broad that any activity performed by any person can be classified as business. So, now every time the above definition is to be seen in line with the objective of the activity performed to decide whether any particular activity is business or not. In the present case the activity performed by applicant is solely for the purpose of social welfare of the society and it is not engaged in any Business or profession as defined the Section 2(17) of the CGST Act.

3. Extract of the functions entrusted to a Panchayat under the Eleventh Schedule to Article 243G of the Constitution are as under:

(i) Agriculture, including agricultural extension, (ii) Land improvement, implementation of land reforms, land consolidation and soil conservation, (iii) Minor irrigation, water management and watershed development, (iv) Animal husbandry, dairying and poultry, (v) Fisheries, (vi) Social forestry and farm forestry, (vii) Minor forest produce, (viii) Small scale industries, including food processing industries, (ix) Khadi, village and cottage industries, (x) Rural housing, (xi) Drinking water, (xii) Fuel and fodder, (xiii) Roads, culverts, bridges, ferries, waterways and other means of communication, (xiv) Rural electrification, including distribution of electricity, (xv) Nonconventional energy sources, (xvi) Poverty alleviation programmed, (xvii) Education, including primary and secondary schools, (xviii) Technical training and vocational education, (xix) Adult and non-formal education, (xx) Libraries, (xxi) Cultural activities, (xxii) Markets and fairs, (xxiii) Health and sanitation, including hospitals, primary health centers and dispensaries, (xxiv) Family welfare, (xxv) Women and child development, (xxvi) Social welfare, including welfare of the handicapped and mentally retarded, (xxvii) Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes, (xxviii) Public distribution system, (xxix) Maintenance of community assets.

The project is a Government funded project.

The extract of Project Administration Manual is as follows:

27. The summary financing plan is given in Table 6

Table 6: Summary Financing Plan

Source Asian Development Bank

28 ADD will finance civil works and equipment at GSP and ITIs, consulting services (e g consulting services for DSC. PMC, ITE. GIZ etc). PMU core management learn, training-related expenses, and contingencies The government will cover civil works at GSP and GSP-City Campus, equipment at GSP and GSP-City Campus, trainers' salaries, social marketing recurrent costs, and contingencies. The government funding will also cover interest and commitment charges

It is clearly evident from above that the activity performed by the applicant is in line with the duties entrusted in the Constitution of India and not in relation to any business or profession.

Ground No. 2: The service provided by supplier of service to the applicant is alternatively exempt under Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017:

1. It is clearly evident from ground no. 1 that the import of service is covered under exemption given in entry no. 10 of Notification No. 9/2017- IT (R), even if we consider the order issued by the Ld. Authority for Advance Ruling that the exemption given in entry no. 10 is not applicable on the applicant then also as per the provisions of the GST Act, once the liability of reverse charge is imposed, all the provisions of the Act shall apply to recipient of service as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. So, in order to arrive at the GST liability of the applicant, first the Ld. Authority should have verified the tax liability on services provided by ITEES to the applicant. The Ld. Authority has erred in not considering the exemption given under entry no. 3 of Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017.

2. Extract from Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017

If we analyze the above entry in light with the service provided by the supplier i.e. ITEES, Singapore to the applicant as below:

1. Pure service: The activity performed by ITEES is pure service in nature. (Consultancy service)

2. Recipient of service: The applicant is State Government department/Government entity.

3. Nature of service: The nature of service provided by the supplier is in relation to Technical and Vocational Education Training Program of the Government of Madhya Pradesh.

4. Function entrusted under constitution: As per point no. 3 of ground no.

1, the activity of imparting Technical and Vocation education is covered by article 243G of the Constitution.

It is clearly evident from the above that even if we consider the liability of reverse charge on import of service by Government, the rate of tax applicable on the service provided by ITEES, Singapore to the applicant will be nil.

The appellant was called for personal hearing on 10.01.2020. Mr. Piyush Wohra CA appeared on behalf of appellant. He reiterated all the issues again. He vehemently argued that his basic question was about taxability of the transaction whereas AAR discussed the matter only with respect to entry number 10 of Notification no. 9/ 2017 IGST (Rate) and ignored the plea taken about constitutional duties.

7. DISCUSSIONS AND FINDINGS-

1. Appellant has described his activity in the Facts of the case and Statement of Facts:

a. The Government of Madhya Pradesh (GOMP) is implementing the Madhya Pradesh Skills Development Project (MPSDP) with the support of Asian Development Bank (ADB).

b. The project for the Establishment of Center for Occupational Skills Acquisition within the Global Skills Park (hereinafter referred as GSP) in Bhopal, Madhya Pradesh was given to Directorate of Skill Development, Department of Technical Education, Skill Development & Employment, (hereinafter referred as DoSD) Government of Madhya Pradesh .

c. The GSP will impart training to 10,000 students every year by trainers of international standard. The park will function on the spirit of 'With Industry-For Industry' and the trained students will be given placement in India and outside India at international level.

d. Some other key features of GSP are

1. International Training Method with On-Job trainings.

2. World Class Industrial machinery, tools, and equipment.

3. State of art classrooms, workshops and other facilities for students.

4. Partnership with Institute of Technical Education Singapore for course curriculum and teacher training.

e. ITE Education Services Pte. Ltd, (ITEES), a Singapore based Consultancy Company as per agreement with Government of Madhya Pradesh is to provide Consulting Services to the Directorate of Skill Development for the said Project.

f. Contract between DoSD and ITEES contains the main scope of work as to advise and guide in the development of Global Skills Park (GSP), in campus design and infrastructure development, equipment design, laboratory and classroom design; curriculum adaptation, academic structuring, training of trainers; leadership development; and examination.

g. The total consideration has been decided to be USD $38,12,740/- which is to be paid in 11 installments.

2. Appellant has put forth following question before AAR

whether the services received by it from a provider of service located in a non-taxable territory would attract the provision of sec 5(3) read along with notification No. 10/2017 IGST(Rate) dated 28.06.2017. In other words, whether Applicant is liable to pay tax under reverse charge mechanism on the transaction mentioned above?

3. Authority for Advance Ruling (AAR) ruled as under

1. The Applicant shall be liable to pay IGST on import of Service under Reverse Charge Mechanism in terms of Notification No.l0/2017-IT(R).

2. This ruling is valid subject to provisions under section 103(2) until and unless declared void under section 104(1) of the GST Act.

4. Appellant being aggrieved with the order has filed appeal before AAAR and raised the same question in his prayer.

5. Appellant has already conceded: -

Sec 5(3) of IGST Act, 2017 read along with Notification No. 10/2017 Integrated Tax (Rate) dated 28th June 2017 provide for the liability of tax to be paid on reverse charge mechanism in case of Import of service by any person located in the taxable territory. Once liability of reverse charge is imposed, all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

Appellant, though has not mentioned but his activity is covered under entry number 1 of the notification as Any service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient.

6. Appellant in his application sought relief through notification 9/2017 IGST (rate) dated 28.06.2017 and referred its entry number 10. He argued that by virtue of this entry his receipt of services for the abovementioned activity would be exempt. The relevant entry is

Services received from a provider of service located in a non-taxable territory by-

(a) the Central Government, State Government, Union territory, a local authority, a governmental authority or an individual in relation to any purpose other than commerce, industry or any other business or profession;

(b) -

7. Authority for Advance Ruling (AAR) duly considered the application and discussed entry number 10 of the notification 9/2017 IGST (Rate) dated 28.06.2017 threadbare. AAR concluded that Applicants (Here Appellant) activity is "business" as defined under GST Act hence the notification does not apply to applicant. AAR on this basis held that Applicant (Here Appellant) shall be liable to pay IGST on import of Service under Reverse Charge Mechanism in terms of Notification No.l0/2017-IT(R).

8. Appellant has stated that his activity is in line with the functions entrusted to Government in the Constitution and it is the social responsibility of Government to impart Technical and Vocation training to create skilled workforce. There is no commercial or business motive in the set-up of this Global Skill Park rather the sole objective is to discharge the duties entrusted in the Constitution of India.

9. He has thus argued before us that his activity does not constitute business and has given elaborate arguments in that direction.

10. Alternatively learned Chartered Accountant has put forth his question again by raising his plea that his sole object, after accepting this transaction to be falling under reverse charge, was to learn if he is exempted by virtue of notification 9/2017 IGST (Rate) dated 28.06.2017.

He says that he as recipient of service, who is government of MP, wanted to learn in advance about the taxability of transaction. The application referred entry 10 of the notification 9/2017 to persuade the AAR to look deep into notification. Fundamental question was summed up in the last line of his question before AAR as "In other words, whether Applicant is liable to pay tax under reverse charge mechanism on the transaction mentioned above?"

11. At this point instead of analysing the arguments of the appellant that whether his activity constitutes "business", we take its alternative plea that he is not liable to tax under entry 3 of notification 9/2017 IGST (Rate) dated 28.06.2017.

12. Entry 3 of this notification without any condition is as: -

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 l[or a Government Entity] 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 243 W of the Constitution.

13. Appellant has argued that to qualify for this entry the requirements are

1. Pure service: The activity performed by ITEES is pure service in nature. (Consultancy service)

2. Recipient of service: The appellant is State Government department/Government entity.

3. Nature of service: The nature of service provided by the supplier is in relation to Technical and Vocational Education Training Program of the Government of Madhya Pradesh.

4. Function entrusted under constitution: As per point no. 3 of ground no. 1, the activity of imparting Technical and Vocation education is covered by article 243G of the Constitution.

After taking us through entry 18 of ELEVENTH SCHEDUEL as per Article 243-G of Constitution of India which is "(xviii) Technical training and vocational education" the suave diligent Chartered Accountant says "It is evident from the above that even if we consider the liability of reverse charge on import of service by Government, the rate of tax applicable on the service provided by ITEES, Singapore to the applicant will be nil."

14. He has thus made his point very well.

15. Facts of the case and Statement of the case mention the object of GSP are as

a. The GSP will impart training to 10,000 students every year by trainers of international standard. The park will function on the spirit of 'With Industry-For Industry' and the trained students will be given placement in India and outside India at international level.

b. International Training Method with On-Job trainings.

c. World Class Industrial machinery, tools, and equipment.

16. The services provided by ITEES to DoSD, Govt of MP have already been accepted by appellant and held by us as falling under reverse charge as per section 5(3) of IGST Act, 2017 read with notification 10 IGST (Rate) dated 28.06.2017. These services are found awfully close to entry XVIII of Eleventh Schedule of Constitution of India. While reading the relevant entry in the notification it is found that it also covers "by way of any activity in relation to any function". This phrase enlarges the scope of every entry to a very wide degree. The services being provided by ITEES may not be directly that of entry XVIII of Eleventh Schedule but when we delve deeper and resort to "in relation to" the function entrusted to a Panchayat under article 243G of Constitution of India, it attains the status which fits very properly. The entry requires the services to qualify either 243G or 243W. 243W being relevant for Municipality. Thus, the services provided by ITEES to DoSD are held to find favour with entry 3 of notification 9/2017 IGST (Rte) dated 28.06.2017 and thereby are held to be exempt from GST.

17. Without prejudice to the discussion above as the appellant has been adjudged falling under reverse charge provisions as per section 5(3) of the IGST Act, 2017 the second leg of this sub-section also comes into play. It says that once liability of reverse charge is imposed, all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. This provision makes the appellant a supplier. Notification 11/2017 IGST (Rate) dated 28.06.2017 as amended on 26.07.2018 says: -

Services by way of any activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution or to a Municipality under article 243W of the Constitution. shall be treated neither as a supply of goods nor a supply of service

18. Thus, it is a case of no supply as per notification 11/2017 IGST (Rate) dated 28.06.2017.

19.In view of forgoing discussion, we pass the following order.

ORDER

The aforementioned pure services received by appellant from ITEES being mentioned at entry XVIII of Eleventh Schedule of Constitution of India qualify for reverse charge under sub-section (3) of section 5 of IGST Act, 2017 read with notification 10/2017 IGST (Rate) dated 28.06.2017 and the appellant, the recipient of services, is exempt from GST as per entry 3 of notification 9/2017 IGST (Rate) dated 28.06.2017.