Classification of service—  That the applicant is engaged in the business of providing Man Power service which includes providing of Technical personal, Data Operator, House Keeping Service etc. to different State Government and Central Government Department.

That applicant is paying GST on whole amount which is received from department which includes salary, PF, ESIC to be paid for the man power being provided by him to the different State Government and Central Government Department and also the administrative Cost/Commission received by the applicant as a whole.

The applicant contends that the services provided by them falls under the Entry Number 3 of the Notification Number 12/2017 Central Tax (Rate) dated 28/06/2017 which stipulates Nil rate of tax for 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 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 243W of the Constitution.

The applicant is of the view that they are exempt from the liability of GST in terms of clause 3 of the Notification No 12/2017 supra, being in the nature of pure service covered under the article 243G and 243W of the Constitution being functions entrusted to the Municipality and Panchayat.

The activity of provision of service of manpower viz. providing of technical personal, data operator, housekeeping service etc. to different State Government and Central Government Department by the applicant though being a “pure service”, is not any sovereign function as envisaged under Article 243G or Article 243W of the Constitution.

Held that— Man power services provided by the applicant to the various Central and State Government departments is liable for GST at the applicable rate and is not eligible to “Nil” rate of tax provided under sr. no. 3 of the Notification No 12/2017-Central (Rate), dated 28-6-2017 on the grounds put forth by the applicant being not covered under the functions envisaged under article 243G and 243W of the Constitution of India. The said service falls under the SAC 998513 attracting 18% GST