Facts: M/s The Nurserymen Co-operative Society Ltd, is a society, which is a wing of Horticulture Department of Government of Karnataka and is registered under the Co-operative Societies Act, 1957, with very small nurserymen as members. The works of formation of parks and land scaping on the lands belonging to the Government and other Government Undertakings is entrusted to this society and they execute the works of deweeding of the land, levelling of land, landscaping and formation of parks in the lands belonging to the Government and other Government Undertakings.
Issue involved: Whether landscaping and gardening work for government departments like BBMP, KSRTC, etc, through works contract attracts GST from this society?
Held: The Hon’ble AAR of Karnataka vide Advance Ruling No. KAR ADRG 18/2018 dated August 06, 2018 divided the activities undertaken by the applicant in two parts viz – maintenance of parks not involving transfer of property in goods and those involving transfer of property in goods. Accordingly, it was ruled that the service of maintenance of parks provided by the society to the State Government, Central Government or a Local Authority (including BBMP) or a Governmental Authority, not involving transfer of property in goods either as a component of a works contract or a composite supply is covered under Entry No. 3 of the Notification No. 12/ 2017 Central Tax (Rate) dated June 28, 2017 and hence exempt. It was observed that activities undertaken by the applicant is covered under Entry No. 3 of said Notification which covers pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to Govt. by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or in in relation to a Municipality under Article 243W of Constitution. It was further explained that activity of maintenance of parks is covered under Entry 12 of Twelfth Schedule to Constitution of India which reads as “Provision of urban amenities and facilities such as parks, gardens, playgrounds” and hence, activity is covered under Article 243W of the Constitution.
It was further ruled that this exemption is not available if there is any transfer of property in goods or if the service is made to persons other than State Government, Central Government or a local Authority or a Governmental Authority.