Classification of service— In the instant case, the applicant has contended that “The ‘Project Management & Consultancy services’ provided by the Applicant has no component of supply of goods and is eligible to be a ‘Pure Service’.

Questions on which Advance Ruling is required is as follows—

Whether the ‘Project Management Consultancy’ services provided to Rajasthan Urban Drinking Water Sewerage and Infrastructure Corporation (RUDSICO) under Rajasthan Secondary Towns Development Sector Project, where Invoice is raised by the Applicant to the Leading Member, who further raise invoice to RUDSICO of complete amount, can be termed as ‘Pure Services’ as referred in SI. No. 3 – (Chapter 99) of Table mentioned in Notification No. 12/2017 – Central Tax (Rate) Dated 28/06/2017 and accordingly eligible for exemption from Central Goods and Service Tax and State Goods & Service Tax.

The services provided by the Applicant to RUDSICO is Project Management & Consultancy Services is in relation to Rajasthan Sector Towns Development Sector Project (RSTDSP) for rehabilitation and expansion of water supply network, rehabilitation and expansion of sewerage network, modernization and construction of new water supply and wastewater treatment plants which is listed in Twelfth Schedule to Article 243W of the Constitution.

In the instance case, as per the master data submitted by the applicant, we find that the total authorized capital is Rs. 50 crores and the paid up capital is Rs. 48.67 crore. We further find that total paid up capital, wherein, only Rs. 41 crore holding with Government of Rajasthan through H.E. governor of Rajasthan, which is less than 90%, as per the definition given under Notification no. 11/2017-Central tax (rate) and Notification no. 12/2017- Central tax (rate) dated 28th June 2017 as stated above, the recipient of the service viz. Rajasthan Urban Drinking Water Sewerage & Infrastructure Corporation Limited (RUDSICO) is not a Governmental authority. Therefore, they are not eligible for exemption under notification no. 12/2017 central tax(Rate) dated 28.06.2017.

Held that— The applicant is not eligible for exemption under notification no. 12/2017 central tax(Rate) dated 28.06.2017.