The Haryana Authority for Advance Rulings (AAR) ruled that the engagement of system integrator for MRBD services for water supply & sewerage connections under the jurisdiction of Municipal corporations are taxable services which attract 18% of GST.
M/s BCITS Pvt. Ltd, the applicant is a registered taxpayer under CGST Act, 2017. They are providing maintenance of the Database, spot billing, meter reading and bill distribution services to the Municipal Corporation, Gurugram for water supply and sewage connections.
A person is deputed area-wise and provides an android device like a mobile phone and printer to generate the water bill by taking the reading in the water meter and will hand over the bill to the consumer. The company provides software to install on mobile phones to enable consumers to generate bills. The scope of work includes all the services of the Water Revenue Management System.
The applicant has received a Work Order from Municipal Corporation Gurgaon (Haryana) for “engagement of system integrator for implementation water revenue management system, creation and maintenance of database, spot billing/meter reading and bill distribution (MRBD) services for water supply & sewerage connections under the jurisdiction of municipal corporation Gurugram. We are providing maintenance of the database, spot billing, meter reading & bill distribution service for water supply & sewerage connections to the Municipal Corporation of Gurgaon.
The nature of services rendered by the applicant is like a software tool operated by its staff. The said services include the creation and maintenance of a database of the consumers and the web-based spot billing and collection of payments on behalf of the Municipal Corporation. These services cannot be termed as pure services as defined under the provisions of the GST Act, 2017. So, these are not covered in clause 5 of the 12th Schedule i.e. water supply for domestic, industrial and commercial purposes.
It was observed that the water supply system necessarily requires procurement, transmission and supply of water to the consumers and meter installation but these functions are being done by the MCG. Whereas the applicant has provided the software services along with manpower to the MCG for the support of water distribution services. It enhances the effectiveness of the services provided by the MCG to the consumers (public at large).
A two-member bench comprising Sunder Lal and Kamud Singh concluded that the services provided by the applicant to MC, Gurugram is a taxable supply. Engagement of system integrator for implementation water revenue management system, creation and maintenance of database, spot billing/meter reading and bill distribution (MRBD) services for water supply & sewerage connections under the jurisdiction of Municipal Corporation, Gurugram is covered under which SAC 998633of the CJST Act, 2017.
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