Telangana State Technology Services Limited ., In re

FULL TEXT OF THE ORDER OF APPELLATE AUTHORITY FOR ADVANCE RULING,TELANGANA

1. In terms of Section 102 of the Telangana Goods and Services Tax Act, 2017 (TGST Act, 2017 or the Act), this Order may be amended by the Appellate authority so as to rectify any error apparent on the face of the record, if such error is noticed by the Appellate authority on its own accord, or is brought to its notice by the concerned officer, the jurisdictional officer or the appellant within a period of six months from the date of the order. Provided that, no rectification which has the effect of enhancing the tax liability or reducing the amount of admissible input tax credit shall be made, unless the appellant or the appellant has been given an opportunity of being heard.

2. Under Section 103 (1) of the Act, this advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only.

(a) On the appellant who had sought it in respect of any matter referred to in sub-Section (2) of Section 97 for advance ruling;

(b) On the concerned officer or the jurisdictional officer in respect of the appellant.

3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed.

4. Under Section 104 (1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-Section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made.

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Subject: GST – Appeal filed by M/s Telangana State Technology Services Limited, Hyderabad, under Section 100 (1) of TGST Act, 2017 against Advance Ruling TSAAR Order No. 12/ 2021dated 04.10.2021 passed by the Telangana State Authority for Advance Ruling – Order-in-Appeal passed – Regarding.

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1. The subject appeal has been filed under Section 100 (1) of the Telangana Goods and Services Tax Act, 2017 (hereinafter referred to as “TGST Act, 2017” or “the Act”, in short) by M/s. Telangana State Technology Services Limited (GSTIN: 36AAFCT5611E1ZK) (hereinafter referred in short as “the appellant”).

2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST Act are identical except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the corresponding provision under the TGST Act. Further, for the purposes of this Advance Ruling, the expression ‘GST Act’ would be a common reference to both CGST Act and TGST Act.

3. This appeal is filed against the Order No.12/2021 dated 04.10.2021 (“impugned order”) passed by the Telangana State Authority for Advance Ruling (Goods and Services Tax) (“Advance Ruling Authority” / “AAR” / “lower Authority”).

Brief facts of the case:

4.1 M/s Telangana State Technology Services Limited(TSTSL) Telangana State Public Sector Undertaking and TSTSL is a Service Agency to the Telangana Government and its Departments relating to Information Technology and its related services.

4.2 One of Such services provided by TSTSL is, acting as a fund manager on behalf of IT E&C Department, Telangana State in executing e-procurement process as per Government the OF G.O.Ms.No.7Telangana, Dated 17-11-2016 Information issued by Technology, Electronics & Communications Department.

4.3 As per the guidelines issued through above stated GO, TSTSL as fund manager receives entire amounts lie e-Procurement Transaction charges) into a designated Bank Accounts On receipt of the eProcurement Transaction Fees (inch of GST), TSTS is paying GST 18%on the entire e Procurement Transaction Fees on monthly basis And TSTS recognizes its share of Service Charges 45 and again pays GST @18% on monthly basis. The balance amounts are utilizing for IT expenditure towards the specific requirements of the Concerned Departments of Telangana State.

4.4 The appellant is of the opinion that he is acting as a pure agent on behalf of the State government which is floating tenders amounting to supply of services and such supply may not attract tax under CGST Act, 2017, hence this application.

Findings of the AAR:

5.1 The appellant is providing service to various departments of Telangana Government in the field of Information technology and related services. These services include e-procurement of various goods & services for these Government departments. It is the opinion of the appellant that such services provided by him fall under Entry 6 of Notification No. 12/ 2017dated: 28.06.2017 and therefore are exempt from any tax under GST.

5.2 The said entry reads as follows:

“Services by the Central Government, State Government, Union territory or local authority excluding the following services:

(a) Services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than the Central Government, State Government, Union territory;

(b) Services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;

(c) Transport of goods or passengers; or

(d) Any service, other than services covered under entries (a) to (c) above, provided to business entities.”

5.3. A careful reading of the said Entry in the Notification reveals that this entry pertains to services provided by the Government and not services provided to the Government. The appellant is providing services to the Government. Therefore the services provided by the appellant to the Government are not exempt under this Notification. Further the services provided by the appellant on behalf of the Government to business entities is covered by the exception to the above entry, therefore such services also are not exempt.

6. Vide the impugned order, the Advance Ruling Authority has given the following advance ruling on the questions raised by the appellant:

7. Aggrieved by the said AAR, the appellant filed an appeal before this appellate authority on the ground that the Ruling of AAR is not justified in giving ruling that the services are liable to tax.

Whether the appeal is filed in time:

8. The date of communication of the AAR is 4.10.2021 and appeal filed on 1.11.2021 and hence, filed within time.

Details of Personal Hearing:

9. Personal Hearing was held on 17.02.2025. Shri K. Sanjeeva Reddy, CA, and Sri Naresh Kumar, appeared on behalf of the appellant. The CA reiterated the written submissions made in their appeal and requested to consider the same.

Discussion and Findings:

10. At the time of personal hearing on 17.2.2025, the authorised representatives, upon being asked, clarified that GST is being paid since inception on the subject service and there is no dispute.

11. In view of the above the following order is passed:

ORDER 

The order of the Authority for Advance Ruling is upheld.