Gujarat AAAR: GST Exemption Nil for Manpower Supply Services to Govt

The Gujarat Appellate Authority for Advance Ruling (GAAAR) ruled that the provider of manpower services to the federal, state, or local governments shall not be eligible for a GST exemption.

The court ruled that the applicant’s employees, who work in security, housekeeping, cleaning, data entry, etc., for numerous government agencies, do not satisfy the requirements for GST exemption. It was held under Input No. 3 of Central Tax (Rate) Notification No. 12/2017, as amended, dated June 28, 2017.

A number of governmental entities are served by the applicant, M/s Sankalp Facilities and Management Services Pvt. Ltd., which also provides manpower supply services.

For the purpose of claiming GST relief on the delivery of workers’ services to the Central Government, State Government, Local Authorities, Governmental Authorities, and other government entities, the applicant has relied on Entry No. 3 to Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017.

The authority noted that the phrases “or a government authority or a government entity” in the heading Description of services opposing the mentioned Entry No.3 to Notification No.12/2017-Central Tax (Rate) has been excluded by GST Notification No.16/2021-Central Tax (Rate) dated 18.11.2021.

Further, the bench, comprising Samir Vakil and Vivek Ranjan, noted that it has been revealed by the applicant that there is no exemption for such services provided to government offices.

The applicant committed an error by thinking that entry No. 3 specifically exempts all services provided to government offices doing the works mentioned in either Article 243G or Article 243W of the Indian Constitution.

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It was noted by the authority that the services related to providing workers were not associated with any activity regarding any function undertaken by these service beneficiaries as mentioned under Articles 243G or 243W of the Constitution of India.