Case Name : KSF- 9 Corporate Services (P.) Ltd., In re (AUTHORITY FOR ADVANCE RULINGS, KARNATAKA)
Case Name : KSF- 9 Corporate Services (P.) Ltd., In re (AUTHORITY FOR ADVANCE RULINGS, KARNATAKA) :
DATE OF ORDER : 02-07-2024
In the case of KSF-9 Corporate Services (P.) Ltd., the Karnataka Authority for Advance Rulings (AAR) addressed whether the supply of security services by the applicant to Bruhat Bengaluru Mahanagara Palike (BBMP) qualifies for GST exemption under specific constitutional provisions. Here’s a simplified explanation with elaboration:
- Background of the Case:
- KSF-9 Corporate Services (P.) Ltd. provides security services to BBMP, the municipal corporation of Bengaluru.
- The applicant sought an advance ruling to determine if these security services are exempt from GST under the provisions related to Panchayats and Municipalities as per the Constitution.
- Constitutional Provisions Considered:
- Article 243G: Pertains to functions entrusted to Panchayats, ensuring autonomy and self-governance at the local level.
- Article 243W: Relates to functions entrusted to Municipalities, similarly emphasizing local self-governance and decentralization.
- Key Issue:
- The crux of the matter was whether the security services provided to BBMP by the applicant were directly related to any specific function entrusted to a Municipality under Article 243W or to a Panchayat under Article 243G.
- AAR’s Decision:
- The AAR ruled that the security services provided by KSF-9 Corporate Services (P.) Ltd. to BBMP did not qualify for GST exemption under Articles 243G or 243W of the Constitution.
- The reasoning behind this decision was that the services were not integral to any specific function or activity entrusted to a Municipality or Panchayat as outlined in the respective articles.
- Therefore, the supply of security services did not meet the conditions necessary for exemption from GST under these constitutional provisions.
- Legal Framework:
- The ruling referenced Section 11 of the Central Goods and Services Tax Act, 2017 (CGST Act) and the Karnataka Goods and Services Tax Act, 2017 (KGST Act), which govern the exemptions and taxable supplies under GST.
It also considered relevant Circulars and Notifications, including Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017, which specifies exemptions under