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No GST payable on Services rendered under Contract with SUDA and PMAY: AAR

The Uttar Pradesh Authority of Advance Ruling (AAR) ruled that no GST payable on Services rendered under the Contract with State Urban Development Agency, Uttar Pradesh (SUDA) and Pradhan Mantri Awas Yojana (PMAY).

Facts of the case:-

The appellant, M/s Arinem Consultancy Services (P) Ltd. sought the advance ruling on the issue Whether preparation of ‘Detailed Project Report’ (DPR) and providing Project Management Consultancy (PMC) services for projects under Beneficiary Led Construction in Lucknow Cluster under Pradhan Mantri Awas Yojna (Urban) under an agreement with State Urban Development Agency (SUDA) would fall under activities in relation to function entrusted to Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India.

The SUDA has been established as a state-level nodal agency, under the department for Urban Employment and Poverty Alleviation by Uttar Pradesh Government and as per the information contained in Memorandum of Association, it is clear that SUDA is a part of the State Government of UP.

Conclusion:-

The coram of Vivek Arya and Abhishek Chauhan ruled that the Services rendered under the contract with State Urban Development Agency, Uttar Pradesh (SUDA), and for PMAY are in relation to functions entrusted to Municipalities under Article 243W and to Panchayats under Article 243G of the Constitution of India.  Such services would qualify as Pure Service (excluding works contract service or other composite supplies involving supply of any goods)” and accordingly exempt from the payment of GST duly covered in SI. No 3 of Notification No. 12/2017-Central Tax (Rate) dated 28 June, 2017 issued under Central Goods and Services Tax Act, 2017 (CGST/Act), and corresponding notifications issued under Uttar Pradesh Goods and Services Tax Act, 2017 (UPGST Act).

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