The Odisha Authority for Advance Ruling ( AAR ) in an application filed by M/s Telecommunication Consultants India Ltd. New Delhi held that services provided under ICT Scheme of Odisha taxable as composite supply since the services provided under ICT Scheme of Odisha Are not ‘Services under training programme’ and hence not exempt.
The applicant in the present case sought for a clarification on the applicability of Entry No. 72 of Notification No. 12/2017-Central Tax read with Entry no. 72 of Notification bearing SRO No. 306/2017-Finance Department to the services provided by the applicant to the government under the ICT i.e. School Project.
The authority noted that the Entry No. 72 concerns ‘Services provided to the Central Govt. (CG), State Govt., U.T. Administration under any training programme for which total expenditure is borne by the CG, SG, UT Administration.’. Hence, the applicant here seeks ruling on the applicability of this Entry to its business transactions to ascertain whether such transaction is exempted from the levy of GST. It submits that Odisha Madhyamik Shikha Mission (OMSM) of Govt. of Odisha had mandated the Odisha Knowledge Corp. Ltd. (OKCL) to implement ICT project in 4000 govt. and govt. aided higher secondary schools across the State of Odisha for which OKCL floated a tender for supply, installation, maintenance and commissioning of Projection System, Interactive White Board, Computer Hardware, etc. for 5 years in 4000 schools divided in 6 zones of which the applicant was a successful bidder and was awarded the tender to execute the contract in one zone. The site preparation and related activities were to be completed within 4 months as was prescribed under the contract.
Further, the applicant submitted that the activities carried by them including installation, commissioning, site maintenance, operation, etc. to implement ICT projects are naturally bundled since it follows the BOOT model. Also, since such contracts are to be carried on by a single vendor. Furthermore, it was submitted that the entire infrastructure was used by the teachers to impart computer training and hence the applicant was engaged in single supply of computer training services to the State of Odisha. And that the object of such computer training was provision of computer training to specific schools in the state of Odisha and not mere creation of infrastructure.
The Bench constituting of Members Sri Anand Satpathy and Sri Nilanjan Pan while referring its Ruling of IL&FS held that 3 pre-requisites are to be satisfied to qualify for the exemption which include: (1) Supply of service provided to the CG/SG/UTA (2) Service under a Training Program (3) Expenditure to be borne by the State. It ruled that OKCL is a body corporate and not govt. The intention of parties was not confined to providing training but to create necessary infrastructure. It hence ruled that the contract is for supply of both goods and services including training constituting ‘Composite Supply’ with distinct values attributable to each commodity and hence do not fall within the exemption notification.
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