GST Applicability on Professional Services to BWSSB: AAR Karnataka Ruling
By: Admin
Date: September 04, 2024
Categories: GST Case Law | Important News
Read Time: 4 Min
AAR Ruling on GST Exemption for Professional Services
The Authority for Advance Rulings (AAR), Karnataka, recently ruled that professional services provided to the Bangalore Water Supply & Sewerage Board (BWSSB) are not exempt from Goods and Services Tax (GST). This decision, detailed in Advance Ruling No. KAR/ADRG/30 of 2024 dated July 2, 2024, involves Ernst and Young LLP.
Services Provided
Ernst and Young LLP offered professional services to BWSSB, specifically helping with corporate tax return filings.
Exemption Not Granted
The firm argued that these services should be exempt under S. No. 3 of Notification No. 12/2017-Central Tax (Rate), amended by Notification No. 16/2021-Central Tax (Rate). However, the AAR found that these services do not qualify for exemption.
Reason for the Decision
The AAR clarified that the services were not related to functions assigned to a Panchayat under Article 243G or a Municipality under Article 243W of the Constitution. Therefore, the exemption did not apply.
Impact on Taxpayers
This ruling confirms that professional services related to corporate tax filings for entities like BWSSB are subject to GST. Taxpayers and service providers must apply GST when offering such services to public authorities unless they are linked to specific constitutional functions.
In summary, the ruling emphasizes that not all services to government bodies are exempt from GST. It is essential to assess the service’s nature and its connection to constitutional functions to determine GST applicability.
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