Levy of GST — The Appellant has received contract from Government departments like BBMP and KSRTC for undertaking gardening and landscaping activities. In order to execute the work, the Appellant has engaged sub-contractors. The sub-contractors bill the Appellant for the gardening and landscaping work done at the government departments. The Appellant in turn bills the Government department in terms of the contract given to them. The issue to be determined is whether the supply of services by the sub-contractor to the Appellant for executing the gardening and landscaping work for government departments is exempt from GST.
Held that— While we agree that the Appellant will not be eligible for the input tax credit of the tax paid on the inward supply from the sub-contractors, we do not agree that this should be a ground for allowing the sub-contractors to avail the benefit of exemption. It is a well settled law that exemption notifications are to be interpreted strictly as to their eligibility. One cannot be influenced by extraneous factors while determining a person's eligibility to an exemption notification. Therefore, on a strict interpretation of the entry Sl.No 3 and 3A, we hold that the supply of services by the sub-contractors to the Appellant is not eligible for the benefit of exemption under either SL.No 3 or 3A of Notification No 12/2017 CT (R) dated 28-06-2017.
We uphold the Advance Ruling and dismiss the appeal. — The Nurserymen Co-Operative Society Ltd., In Re… [2020] 24 TAXLOK.COM 011 (AAAR-Karnataka)