In re Utpal Kumar Guha (GST AAR West Bengal)
Supply of MVU personnel under Livestock Health & Disease Control Scheme is not eligible for GST exemption: GST AAR West Bengal
Authority for Advance Rulings (AAR) in West Bengal examined whether the supply of Mobile Veterinary Unit (MVU) personnel on a contractual basis qualified for a Goods and Services Tax (GST) exemption under Notification No. 12/2017-Central Tax (Rate). The applicant, a proprietorship firm, had entered into an agreement with the West Bengal Livestock Development Corporation Limited, a government undertaking, to provide MVU personnel for the “Establishment and Strengthening of Veterinary Hospitals & Dispensaries (ESVHD) – Mobile Veterinary Unit (MVU)” under the Livestock Health & Disease Control Scheme. The firm sought an advance ruling to determine whether its services were exempt from GST under specific provisions of the notification.
The applicant argued that the services provided were an essential part of the government’s initiative to strengthen veterinary healthcare infrastructure. The West Bengal Livestock Development Corporation Limited, as a designated service provider for operating MVUs, engaged the applicant to supply personnel for veterinary healthcare services. The applicant contended that since the scheme aimed to improve the animal health sector through government-funded initiatives, the service provided should fall within the exemptions outlined in Notification No. 12/2017. They also highlighted that the government had issued standard operating procedures for MVUs and that the services were directly under the control of government authorities.
However, after examining the agreement, operational structure, and government notifications, the AAR concluded that the applicant’s services did not qualify for exemption. The ruling clarified that the supply of manpower, even for a government scheme, does not automatically become tax-exempt unless it falls within the specific criteria mentioned in the notification. The authority found that the applicant was merely providing outsourced personnel on a contractual basis, and such services were subject to GST. As a result, the supply of MVU personnel was not covered under Sl. No. 3, 3A, 5, 6, or 46 of Notification No. 12/2017-Central Tax (Rate).
This ruling aligns with previous judicial precedents that have established that exemptions under GST notifications must be interpreted strictly. Courts and tribunals have consistently ruled that unless a service provider is directly engaged in a government function without commercial considerations, GST exemptions do not apply. The decision reinforces the principle that contractual manpower supply, even for government schemes, remains taxable unless explicitly exempted by law. The ruling sets a precedent for similar cases involving contractual manpower services for government-backed projects, emphasizing the necessity of a clear legal basis for tax exemptions.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING WEST BENGAL
1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017(the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression ―GST Act” would mean the CGST Act and the WBGST Act both.
1.2 The applicant is a proprietorship firm engaged in the supply of contractual manpower and duly registered under the present Goods and Services Tax regime. The applicant entered into an agreement with the West Bengal Livestock Development Corporation Limited, which is a Government of West Bengal Undertaking, for providing Mobile Veterinary Unit (MVU) personnel on contractual basis at different units of the State of West Bengal Livestock Development Corporation Limited. The said agreement was executed pursuant to the applicant‘s tender having been accepted in this behalf.
1.3 The applicant has made this application under sub section (1) of section 97 of the GST Act and the rules made there under seeking an advance ruling in respect of following question:
(i)Whether the applicant‘s supply of MVU personnel on contractual basis for implementation of ―Establishment and Strengthening of Veterinary Hospitals & Dispensaries (ESVHD) – Mobile Veterinary Unit (MVU) under Livestock Health & Disease Control (LH & DC) Scheme” is eligible for exemption benefit under Notification No. 12/2017-Central Tax (Rate) dated 18.06.2017 (Sl. No. 3 or 5/6 or 46, as the case may be), as amended?
1.4 The aforesaid questions on which the advance ruling is sought for are found to be covered under clause (b) of sub-section (2) of section 97 of the GST Act.
1.5 The applicant states that the questions raised in the application have neither been decided by nor are pending before any authority under any provision of the GST Act.
1.6 The officer concerned from the Revenue has raised no objection to the admission of the application.
1.7 The application is, therefore, admitted.
2. Submission of the Applicant
2.1. The West Bengal Livestock Development Corporation Limited produces, inter alia, meat and meat products of both conventional and non-conventional meat items from its meat plants and produces feed items like cattle feed, poultry feed etc. and also carries on the business of purchase and sale of animals and birds and certain agricultural products like ghee, honey and mustered oil etc. In terms of an agreement executed on 18.10.2022, the applicant is required to, inter alia, supply labour/manpower for running the production at different units of the West Bengal Livestock Development Corporation Limited.
2.2 The applicant is also required to perform a host of assignments, including provision of animal healthcare services through deployment of Mobile Veterinary Units (MVUs) under the Livestock Health & Disease Control Scheme of the Department of Animal Husbandry and Dairying, Ministry of Fisheries & Animal Husbandry and Dairying, Government of India. The West Bengal Livestock Development Corporation Limited is one of the designated Service Providers for operating MVUs in the allotted Districts of West Bengal. For implementation of the said scheme, operational guidelines have been issued by the Department of Animal Husbandry & Dairying, Government of India.
2.3 On 13.02.2023 a memorandum was issued by the Chief Executive Officer, Paschim Banga Go-Sampad Bikash Sanstha to the Deputy Director, ARD & PO Department, Government of West Bengal on the acceptance of Mobile Veterinary Units. It was stated in the said memorandum that emergency animal healthcare services at farmers‟ door step would be provided through Mobile Veterinary Units (MVUs) and that the competent authority had approved the operation of Mobile Veterinary Units in different districts by the service provider/West Bengal Livestock Development Corporation Limited as per the following details –
| No. of MVU | Districts to be covered |
| 71 | Coochbehar, Jalpaiguri, Alipurduar, Siliguri, South 24 Parganas and Paschim Burdwan and Nadia |
2.4 On 22.03.2023 the Department of Animal Resources Development, Government of West Bengal, issued standard operating procedures for Establishment & Strengthening of Veterinary Hospitals & Dispensaries (ESVHD) – Mobile Veterinary Unit (MVU) under Livestock Healthcare & Disease Control (LH & DC) Scheme. The said standard operating procedure contains guidelines as to the mode of operation of Mobile Veterinary Units in several blocks of the State. The costs for operationalization of the said scheme and other charges have been provided in detail in the standard operating procedures.
2.5 On 01.04.2024 the aforesaid West Bengal Livestock Development Corporation Limited directed the applicant to supply MVU personnel purely on contractual basis, maintaining the guidelines of the aforesaid tender as well as MVU guidelines issued by the competent authority from time to time. As per the memo dated 01.04.2024 regarding deployment of MVU personnel, the applicant/M/s Star Security & Detective Agency is required to instruct its MVU personnel for running their services under officers of ARD Department, Government of West Bengal, of his/her respective blocks as well as “directly” place the service “to the ARD Department, Govt. of West Bengal, for implementation”.
2.6 The applicant has, accordingly, been supplying MVU personnel to the State Government/ West Bengal Livestock Development Corporation Limited and raising tax invoices from time to time.
2.7 The Livestock Healthcare & Disease Control Scheme is a flagship program of the Government of India, where under the overall aim is to improve the animal health sector by way of implementation of prophylactic vaccination programs against various diseases of livestock and poultry, capacity building, disease surveillance and strengthening of the veterinary infrastructure. Provision of veterinary services at the farmers‟ door step through Mobile Veterinary Units (MVUs) is one of the objectives of the said scheme. As part of the implementation strategy of the said scheme, the concerned State Government have been entrusted with the responsibility of developing further guidelines, including delineating roles and responsibilities of all functionaries at different levels. It has been contemplated in the said scheme that Mobile Veterinary Units (each having one veterinarian, one para-veterinarian and one driver cum attendant) would be operationalized as part of the strategy for Establishment & Strengthening of Veterinary Hospitals & Dispensaries, funds for which will be provided by the Central Government to the State Government/Union Territories. It has also been contemplated that the Mobile Veterinary Units could run on PPP model with the government providing the infrastructure but manpower being outsourced by the implementing agencies.
2.8 From a careful reading of the said operational guidelines as well as the aims and objectives of the Scheme, it becomes clear that the Central Government in association with the State Government has sought to operationalize Mobile Veterinary Units as part of the strategy for Establishment & Strengthening of Veterinary Hospitals & Dispensaries. It also becomes clear that the MVUs would run on PPP mode, whereby manpower would be outsourced by the implementing agencies to private parties such as the present applicant. Thus, execution of the Livestock and Disease Control Scheme involves performance of several individual activities. Private manpower suppliers such as the instant applicant is one such partner entrusted with the responsibility of providing MVU personnel on PPP basis, although overall responsibility lies with the concerned State Government/Union Territory Government.
2.9 As consideration for provision of MVU personnel on contractual basis, the applicant has been receiving stipulated remuneration from time to time, although without GST thereon.
2.10 Sl. No. 5 of Notification. 10/2017-Central Tax (Rate) dated 28.06.2017 exempts services by a Governmental Authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Indian Constitution. Animal husbandry, darying and poultry is specifically enumerated as a function entrusted to a Panchayat under Article 243G of the Constitution read with the 11th Schedule. As such, provision of MVU personnel by the applicant ought to be understood as provision of Panchayat functions by a Governmental Authority and hence eligible for exemption. That only a successfully empanelled service provider is entrusted with the responsibility of providing MVU personnel and given the level of supervision and overall superintendence exercised by the concerned Governmental Authority in discharge of obligations relating to improvement of healthcare of birds and animals and emergency services at farmers‘ doorstep, it must be acknowledged that the applicant has been acting as mirror reflection/extended arm of the very Governmental Authority.
2.11 On the other hand, Sl. 6 of the aforesaid Notification dated 28.06.2017 exempts services by the Central Government, State Government, Union Territory or local authority excluding the following –
a) Services by the Departments of Posts;
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 serviced entered under entries (a) to (c) above provided to business entities
Operationalization of Mobile Veterinary Units under a scheme of Ministry of Fisheries, Animal Husbandry & Dairying, Government of India amounts to provision of services by the Central Government as well as State Government, although on PPP model. Such services are wholly intended for benefit of the public at large and the same seek to improve the animal health sector. As such, supply of Mobile Veterinary Unit personnel by the applicant which forms part of the overall execution of the Livestock Health & Disease Control Scheme should be classified under the said Sl. No. 6 of the aforesaid exemption notification dated 28.06.2017.
2.12 The applicant‘s provision of MVU personnel ought not to be segregated as an individual supply by a private party to the Governmental Authority/Government and charged to GST separately. The applicant is but an extension of the arm of the Governmental authority/Government concerned inasmuch as the PPP model is nothing but a modality for operationalizing the Scheme above-mentioned. Any contrary approach would be destructive of the Government‘s intention as well violative of the beneficial objectives sought to be achieved. It is in this context that outsourcing of MVU personnel services to the applicant which is already a successful tendered of the West Bengal Livestock Development Corporation Limited should be understood.
2.13 No element of individual ―supply‟ by the applicant is involved in the instant facts and circumstances and the entire project of execution of the Scheme above-mentioned must be understood as an integrated provision of services by the Government entity/Government concerned. This is evident from a plain reading of the memo dated 01.04.2024 issued by the West Bengal Livestock Development Corporation Limited, wherein it has been stipulated that the services of MVU personnel may be ―directly placed to the ARD Department, Govt. of West Bengal‖.
2.14 Alternatively and without prejudice, the applicant‘s supply of services in question ought to be understood as services provided to the Central Government or State Government by way of any activity in relation to a function entrusted to a Panchayat/Municipality under Articles 243G/243W of the Constitution of India read with the 11th and 12th Schedules thereto. Accordingly, the said services may be held as falling under Sl. No. 3 of the aforesaid exemption notification dated 28.06.2017. It cannot be denied that boosting the animal healthcare infrastructure and providing emergency medical services in this regard form part of the overall duties and responsibilities of a forward-looking State in today‘s day and age. Further, animal husbandry, darying and poultry is directly covered by entry no.4 of the 11th Schedule to the Constitution of India. It is in view of the salutary principles embodied in Article 48 of the Constitution of India as Directive Principle of State Policy that the said exemption benefit under Sl. No.3 of the aforesaid Notification dated 28.06.2017 should be understood. In this regard, the applicant relies on FAQ on Government Services under GST issued by the Directorate of Commercial Taxes, West Bengal for guidance purposes.
2.15 Even assuming though denying that the supplies in question do not fall within the scope and ambit of either Sl. No. 3 or Sl. No. 5/6, as the case may be, of the aforesaid exemption Notification, then also such services may be classified under heading 9983 (SAC), thereby falling under Sl. No. 46 of the aforesaid Notification dated 28.06.2017. Undoubtedly, provision of Mobile Veterinary Unit personnel involves the primary element of healthcare of animals or birds and keeping in view the larger objectives behind implementation of the Livestock Health and Disease Control Scheme, exemption benefit under Sl. No. 46 of the aforesaid exemption benefit should be extended to the applicant in the present case. After all, just because of the private-public partnership model through which the aforesaid Scheme is being implemented, exemption which is otherwise available to the supplier should not be denied, especially since the core aspect of the entire services of a veterinarian, para-veterinarian and ambulance/MVU driver cum attendant is provision of healthcare of animals and birds.
2.16 The applicant states that animal husbandry, caring for farm animals and provision of healthcare services are intrinsically connected. Under Article 243G of the Constitution of India read with entry no. 4 to the Eleventh Schedule thereto, a Panchayat is responsible for implementation of schemes, amongst others, in relation to the matter of animal husbandry, dairying and poultry. The services in question provided by the applicant fall within the ambit of “by way of any activity in relation to any function entrusted to a Panchayat” and are eligible for exemption under sl. no. 3 Notification. 10/2017-Central Tax (Rate) dated 28.06.2017
2.17 From a perusal of the definition of ‘animal husbandry’ given in authoritative dictionaries, it becomes evident that rendering of healthcare services and caring for livestock and poultry are inbuilt in the concept of animal husbandry activities. The said definitions are set out here under as follows:
a)The American Heritage College Dictionary (fourth edition) defines animal husbandry as the branch of agriculture concerned with the care and breeding of domestic animals.
b)Words and Phrases Legally Defined (fourth edition) states that the rules of good husbandry include taking of necessary steps to, inter alia, maintain crops and livestock free from disease.
c)The World Book Dictionary defines animal husbandry as the breeding, raising and care of farm animals.
d)Webster’s Encyclopedic Unabridged Dictionary of the English Language defines animal husbandry as the science of breeding, feeding and tending domestic animals.
2.18 In common parlance and in the field of science, provision of animal healthcare and disease control is understood as part and parcel of animal husbandry activities. In ‘A Textbook of Animal Husbandry’ (eighth edition) the author, G.C. Banerjee lucidly explains the term husbandry in connection with animal husbandry as including proper feeding, breeding, healthcare and housing of domesticated farm animals. The intrinsic link between good husbandry, animal welfare and efficient production has also been recognized in the book ‘Management and Welfare of Farm Animals: The UFAW Farm Handbook’ (sixth edition), edited by John Webster and Jean Margerison. It cannot be denied that, in the absence of proper veterinary infrastructure and adequate healthcare facilities to livestock and poultry, farm output and/or diary production would be negatively impacted. That management of animal husbandry involves providing best medical service to farm animals has been recognized by the leader of India’s dairy industry, namely, Amul (Anand Milk Union Limited). It also stands acknowledged by Amul that the first Mobile Veterinary Dispensary had been flagged off by late Dr. Rajendra Prasad, the then President of India way back in the year 1950. The Food and Agriculture Organization of the United Nations has also highlighted that animal health is a core element for sustainable development and livestock production.
2.19 The applicant invites kind attention to Section 207B of the West Bengal Panchayat Act, 1973 which provides for transfer of powers, functions and duties to a panchayat as are exercised and performed by the State Government in relation to animal resources development. In this regard, it may be noted that the Department of Animal Resources Development, Government of West Bengal is responsible for formulation and implementation of livestock and poultry policies in the state of West Bengal and one of its main functions relates to providing of health cover and containment of diseases through various services as well as disease diagnosis and surveillance.
2.20 It is humbly submitted that a forward-looking State is constitutionally obligated to boost the animal healthcare sector and take steps for disease control, as part of its duties to organize animal husbandry on scientific lines. Such view of the matter would also accord with animal welfare jurisprudence in India.
2.21 The principle of contemporanea expositio, which is a well settled principle of statutory interpretation, fully supports the applicant’s aforesaid explanations and submissions. The Department of Animal Husbandry and Dairying under the Ministry of Fisheries, Animal Husbandry and Dairying (Government of India) has itself recognized the preservation and protection of livestock through provision of healthcare as a main thrust area. The said Department of the Government of India is responsible for matters relating to livestock production, preservation, protection from diseases and matters connected therewith. Protection of livestock through provisioning of adequate healthcare facilities has been listed as one of the main objectives of the Department of Animal Husbandry and Dairying. It is pertinent to mention that the Brief note on 9 Years’ achievement of the said Department of Government of India, issued by the Press Information Bureau on 27.06.2023, made reference to the Livestock Health and Disease Control Scheme (Establishment and Strengthening of existing Veterinary Hospitals and Dispensaries – Mobile Veterinary Units) as one of the various schemes implemented for the development of animal husbandry and dairy sector across the country. It cannot be denied that the applicant’s supply of MVU personnel for implementation of ‘Establishment and Strengthening of Veterinary Hospitals & Dispensaries (ESVHD) – Mobile Veterinary Unit (MVU) under Livestock Health & Disease Control (LH & DC) Scheme’ directly and substantially pertains to animal husbandry, dairying and poultry.
2.22 The applicant also draws kind attention of this Authority to the provisions of Article 48 of the Constitution of India which is a Directive Principle of State Policy and enjoins the State to organize animal husbandry on modern and scientific lines. The words ‘improvement of stock and prevention of animal diseases’ also find mention in entry no.15 to the Seventh Schedule of the Constitution of India under List Il-State List, meaning thereby that disease control and provision of medical care to farm animals affect the overall livestock and poultry production. The Constitution of India is a living document and the noble aspirations therein should be given full effect to and the words and phrases used in the Constitution should not be interpreted restrictively. It is in this backdrop that entry no. 4 to the Eleventh Schedule of the Constitution of India should be understood. It conclusively follows there from that animal husbandry, dairying and poultry encompasses provision of medical care and disease control. Furthermore, no contrary material suggesting otherwise has been brought on record by the State GST Department/ revenue till date.
2.23 The applicant has submitted a certificate from Directorate of Animal Resources & Animal Health vide memo no. 5168/5P-608/2021 (P-II) dated 27-12-2024 where the Director of Animal Husbandry & Veterinary Services, West Bengal inter alia certifies that:
(i) the applicant is an selected agency (through tender) of the West Bengal Livestock Development Corporation Ltd, a Government of West Bengal Undertaking;
(ii) the applicant has been providing the said services directly to the Government of West Bengal through ARD Department, which exercises effective control over the Livestock Health & Disease Control Scheme and is responsible for its implementation in the state of West Bengal. The ARD Dept Govt of west Bengal provides the infrastructure and funding for the scheme in collaboration with the Government of India.
(iii) it is to be understood that the Government of West Bengal is the recipient of services from the applicant.
2.24 The applicant thus is of the view that the services in question are eligible for exemption under sl. no. 3 of Notification No. 12/2017-CT(Rate) dated 28.06.20217.
3. Submission of the Revenue
3.1 The Assistant Commissioner of CGST & CX, Park Street Division, Kolkata South CGST & CX Commissionerate has expressed his views as under:
It is to inform that such services are not exempted as per Notification No. 12/2017-Central Tax. As per Sl. No. 46 of Notification No. 12/2017-Central Tax services of only veterinary clinic is exempted. Therefore, applicant‘s case appears to be not covered.
Also as per Article 246(3) of the Constitution of India, matters related to preservation, protection and improvement of livestock, prevention of animal diseases, and veterinary training falls under the State List, granting states exclusive legislative powers.
4. Observations & Findings of the Authority
4.1 We have gone through the records of the issue as well as submissions made by the authorized advocate of the applicant during personal hearing.
4.2 The applicant in this case, in support of his claim for exemption, has raised the following issues which need to be analyzed:
(i)Whether no element of individual ―supply‟ by the applicant is involved in the instant facts and circumstances and the entire project of execution of the Scheme above-mentioned is as an integrated provision of services by the Government authority/Government concerned?
(ii)In light of such, whether the supply in this case is being provided by the Government, i.e. Department of Animal Resources Development, Govt. of West Bengal, and is exempted in terms of Sl. No. 5 or 6 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017?
(iii)Whether the applicant‘s supply of services in question is exempted in terms of Sl. No. 3 of the aforesaid exemption notification dated 28.06.2017?
(iv)Whether such services being classified under heading 9983 (SAC) and is exempted in terms of Sl. No. 46 of the aforesaid Notification dated 28.06.2017
The aforesaid issues are being discussed and observations thereupon are being made as follows.
4.3 We find from the submissions made by the applicant himself, that the Livestock Healthcare & Disease Control Scheme is a flagship program of the Government of India, where the concerned State Government has been entrusted with the responsibility of developing further guidelines, including delineating roles and responsibilities of all functionaries at different levels. The West Bengal Livestock Development Corporation Limited, under the administrative control of the Department of Animal Resources Development, Govt. of West Bengal, is the project implementing agency for such Livestock Healthcare & Disease Control Scheme and is one of the designated Service Providers for operating MVUs in the allotted districts of West Bengal.
4.4. Accordingly, West Bengal Livestock Development Corporation Limited directed the applicant to supply MVU personnel purely on contractual basis, maintaining the guidelines of the tender applicable in this case as well as MVU guidelines issued by the competent authority from time to time. The applicant is required to, inter alia, supply labour/manpower for running the production at different units of the West Bengal Livestock Development Corporation Limited. The applicant has, accordingly, been supplying MVU personnel and raising tax invoices from time to time. The applicant– service provider is also required to perform a host of assignments, including provision of animal healthcare services through deployment of Mobile Veterinary Units (MVUs) under the Livestock Health & Disease Control Scheme of the Department of Animal Husbandry and Dairying, Ministry of Fisheries & Animal Husbandry and Dairying, Government of India. Admittedly the applicant makes supply of labour/manpower for running the production at different units of the West Bengal Livestock Development Corporation Limited.
4.5 Clause (93) of section 2 of the GST Act speaks that ―recipient‖ of supply of goods or services or both, means—
(a)where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration;
(b)where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and
(c)where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied;
4.6 In the instant case, the West Bengal Livestock Development Corporation Limited has entered into an agreement with the applicant for supply of MUV personnel on contractual basis for which the applicant issues invoices to the aforesaid implementing agency. Admittedly, the West Bengal Livestock Development Corporation Limited is liable to pay the consideration to the applicant for the supply. The applicant has furnished a copy of tax invoice which has been raised to the Managing Director, West Bengal Livestock Development Corporation Limited holding GSTIN 19AABCT0907D1ZP. Thus, West Bengal Livestock Development Corporation Limited undisputedly is the recipient of supply provided by the applicant meaning thereby the applicant doesn‘t make any supply to the Department concerned.
4.7 We therefore find that in the instant case, two separate supplies take place. The first one is made by the applicant to West Bengal Livestock Development Corporation Limited and thereafter another supply is made by the West Bengal Livestock Development Corporation Limited to the Department concerned. Thus, in light of the issue under sl. (i) of para 4.2 above, it is observed that the applicant‘s contention that the entire project of execution of the Scheme above-mentioned cannot be held as an integrated provision of services by the Government entity/Government concerned and that the applicant providing services directly to the Government does not stand either.
4.8 Regarding the issue under sl. (ii) of para 4.2 above, i.e. whether the supply in this case is being provided by the Government, i.e. Department of Animal Resources Development, Govt. of West Bengal, and is exempted in terms of Sl. No. 5 or 6 of the Notification. 10/2017-Central Tax (Rate) dated 28.06.2017 , this is to mention that the entry in terms of Sl. No. 5 of the Notification. 10/2017-Central Tax (Rate) dated 28.06.2017 is concerned exclusively with supply of services by a Governmental Authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution, whereas, the entry in terms of Sl. No. 6 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 is concerned exclusively with supply of services by the Central Government, State Government, Union territory or local authority excluding (a) services by the Department of Posts and the Ministry of Railways (Indian Railways)]; (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.
4.9 As already discussed above, the applicant‘s contention that the entire project of execution of the Scheme above-mentioned cannot be held as an integrated provision of services by the Governmental authority/Government concerned and that the applicant is not providing services directly to the Government. The applicant himself is neither Government nor a Governmental Authority. Hence, the applicant‘s supply of MVU personnel on contractual basis for implementation of ―Establishment and Strengthening of Veterinary Hospitals & Dispensaries (ESVHD) – Mobile Veterinary Unit (MVU) under Livestock Health & Disease Control (LH & DC) Scheme” does not qualify for exemption benefit under Sl. No. 5 or 6 of the Notification No. 12/2017-Central Tax (Rate) dated 18.06.2017 as amended till date.
4.10 Regarding the issue under sl. (iii) of para 4.2 above, i.e. whether the applicant‘s supply of services in question is exempted in terms of Sl. No. 3 of the aforesaid exemption notification dated 28.06.2017, this is to mention that there are three preconditions for enjoying the benefit of exemption under the said entry which are enumerated as follows:
(a) The supply so provided shall be a pure services (excluding works contract service or other composite supplies involving supply of any goods);
(b) The supply shall be provided to the Central Government, State Government or Union territory or local authority;
(c) The supply shall be provided by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.
This is needless to say that in order to enjoy the benefit of exemption under the afore-said entry, all of these three pre-conditions need to be fulfilled.
4.11 In the instant case, the applicant is engaged in supplying MVU personnel on contractual basis for implementation of ―Establishment and Strengthening of Veterinary Hospitals & Dispensaries (ESVHD) – Mobile Veterinary Unit (MVU) under Livestock Health & Disease Control (LH & DC) Scheme”. For a fully functional Mobile Veterinary Unit (MVU), both services (in the form of manpower) as well as goods (medicines, disposables etc) are required. Adequate information regarding the supply part involving goods is not clear in this case. In case, the applicant himself is supplying the goods element, then automatically this supply fails to qualify as pure service as per precondition, vide sl. (a) as discussed in para 4.10 above, of Sl. No. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 18.06.2017. In that case, one may consider Sl. No. 3A of the afore-said Notification where it requires to be ascertained whether the concerned composite supply of goods and services is of the nature where the value of supply of goods constitutes not more than 25 per cent. of the value of the said composite supply. The other two pre-conditions vide sl. (b) and (c) as discussed in para 4.10 above, stand applicable for both Sl. Nos. 3 as well as 3A of the Notification No. 12/2017-Central Tax (Rate) dated 18.06.2017.
4.12 Now, regarding the pre-condition, vide sl. (c) as discussed in para 4.10 above, there is no denial that the applicant‘s supply of services in question is related to animal husbandry, darying and poultry is directly covered by entry no.4 of the 11th Schedule to the Constitution of India appended to Article 243G of the Constitution of India and hence can be held as a supply by way of an activity in relation to a function entrusted to a Panchayat/Municipality under Articles 243G/243W of the Constitution of India.
4.13 But, as per the pre-condition, vide sl. (b) as discussed in para 4.10 above, a supply, in order to qualify for exemption benefit under Sl. No. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 18.06.2017 shall has to be provided to the Central Government, State Government or Union territory or local authority. This is to re-iterate that as discussed in para 4.7, the applicant is making the supply of MVU personnel on contractual basis for implementation of ―Establishment and Strengthening of Veterinary Hospitals & Dispensaries (ESVHD) – Mobile Veterinary Unit (MVU) under Livestock Health & Disease Control (LH & DC) Scheme to West Bengal Livestock Development Corporation Limited. West Bengal Livestock Development Corporation Limited is neither Central Government, State Government or Union territory nor a local authority. Thus the pre-condition, vide sl. (b) as discussed in para 4.10 above, does not get fulfilled and hence, the applicant‘s supply of MVU personnel on contractual basis for implementation of ―Establishment and Strengthening of Veterinary Hospitals & Dispensaries (ESVHD) – Mobile Veterinary Unit (MVU) under Livestock Health & Disease Control (LH & DC) Scheme‖ does not qualify for exemption benefit under Sl. No. 3 or 3A of the Notification No. 12/2017-Central Tax (Rate) dated 18.06.2017 as amended till date.
4.14 Regarding the issue under sl. (iv) of para 4.2 above, i.e. whether such services being classified under heading 9983 (SAC) and is exempted in terms of Sl. No. 46 of the aforesaid Notification dated 28.06.2017, this is to mention that the said entry exempts services by a veterinary clinic in relation to health care of animals or birds. Now the issue is, whether the applicant who is merely supplying MVU personnel on contractual basis for implementation of ―Establishment and Strengthening of Veterinary Hospitals & Dispensaries (ESVHD) – Mobile Veterinary Unit (MVU) can be regarded as a veterinary clinic?
4.15 As already discussed above, in the instant case, two separate supplies take place. The first one is made by the applicant to West Bengal Livestock Development Corporation Limited and thereafter another supply is made by West Bengal Livestock Development Corporation Limited to the Department concerned, i.e. the Department of Animal Resources Development, Govt. of West Bengal. The expression ‗veterinary clinic‘ has not been defined in the GST Act. However, in common parlance, a veterinary clinic means a building or part of a building where animals are provided with treatment or medication including diagnosis, surgery, general health care and observation. Here the applicant is merely a supplier of manpower services on contractual basis for running a Mobile Veterinary Unit. Thus, such supply of manpower made by the applicant cannot be held as a supply of services by a veterinary clinic in relation to health care of animals or birds and hence such supply fails to qualify for exemption benefit under Sl. No. 46 of the Notification No. 12/2017-Central Tax (Rate) dated 18.06.2017 as amended.
In view of the foregoing, we rule as under:
RULING
The applicant‘s supply of MVU personnel on contractual basis for implementation of ―Establishment and Strengthening of Veterinary Hospitals & Dispensaries (ESVHD) – Mobile Veterinary Unit (MVU) under Livestock Health & Disease Control (LH & DC) Scheme‖ is not eligible for exemption benefit under Sl. No. 3 or 3A or 5 or 6 or 46 of the Notification No. 12/2017-Central Tax (Rate) dated 18.06.2017, as amended till date.