Levy of GST—The question before authority is that Whether the Project Development and Management Consultancy services (‘PDMC’) provided by Applicant to recipient under the Contract for AMRUT; and the Project Management Consultancy services (‘PMC’) under the Contract for PMAY would qualify as an activity in relation to function entrusted to Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India?

If answer to the above question is in affirmative, would such services provided by the Applicant qualify as “Pure services (excluding works contract service or other composite supplies involving supply of any goods)” as provided in serial number 3of Notification No. 12/2017- Central Tax (Rate) dated 28 June, 2017.
we hold that such purchases of equipments, furniture, etc. would neither make the said contract of consultancy as a works contract, nor a composite contract, and therefore, due to purchase of Equipments, Furniture, etc. by the applicant, and getting reimbursement of their costs from the employer will not affect eligibility of the applicant for NIL rate of tax in Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate), dated 28th June, 2017 and corresponding notification issued under Madhya Pradesh Goods and Services Tax Act, 2017 (MPGST) Act in respect of Consultancy services rendered under the contract in question.

Ruling—In respect of Question 1, we hold that the Project Development and Management Consultancy services (‘PDMC’) provided by Applicant to recipient under the Contract for AMRUT; and the Project Management Consultancy services (‘PMC’) under the Contract for PMAY would qualify as an activity in relation to function entrusted to Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India.

In respect of Question No.2, we hold that such services provided by the Applicant would qualify as “Pure services (excluding works contract service or other composite supplies involving supply of any goods)” as provided in serial number 3of Notification No. 12/2017- Central Tax (Rate) dated 28 June, 2017 in respect of the cost of service rendered along with reimbursement of cost of procurement of goods for rendering such service, and, thus, be eligible for exemption from levy of CGST and MPGST, respectively. However, the disposal of tangible goods at the end of contract shall be subject to GST depending upon the circumstances and manner of disposal of such tangible goods. [2018] 2 TAXLOK.COM 257 (AAR-Madhya Pradesh)