Classification of service- In the instant case, the applicant has sought advance ruling on the following questions:
1. Whether the supply of labour services for collection of seeds from forest, digging contour trenches, chal-khal (water conservation pits in hills) for soil and moisture conservation, clearing of fire lines in forest to protect forest from fire which causes damage to forest, controlled burning of portion of forest to prevent spread of fire and damage to environment in included in exempted services in Notification No. 12/2017 Central Tax (Rate ) dated 28-06-2017 or any other related exemption notification.
2. If above supply of service is not included in any exemption notifications as per Question 1, the rate of goods and service tax applicable to such supply of services.
3. Whether the supply of services for raising seedlings in nursery is exempted services in Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017 or any other related exemption notification.
4. If above supply of service is not included in any exemption notifications as per Question 3, the rate of goods and service tax applicable to such supply of services.
5. Whether the supply of services for plantation in forest is exempted services in Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017 or any other related exemption notification.
6. If above supply of service is not included in any exemption notifications as per Question 5, the rate of goods and service tax applicable to such supply of services.
7. Whether the supply of services for creation of check-dam for Soil and Moisture Conservation is exempted services in Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017 or any other related exemption notification.
8. If above supply of service is not included in any exemption notifications as per Question 7, the rate of goods and service tax applicable to such supply of services.
9. The section 51 of the CGST specifies that TDS is to be deducted when total value of taxable goods or services or both under a contract exceeds Rs. 2,50,000. Most the mentioned works in this application are small in nature. Therefore, the value of single contract in most cases is less than Rs. 2,50,000. However, the service provider registered with the department provides services for many works like one contract for nursery, second for plantation, third for fire lines and so on. The value of all contract combined may become more than Rs. 10 Lakhs in some cases. Whether, TDS is to be deducted if applicant gives contract for multiple works to the contractor, the cumulative contract value is more than Rs. 2,50,000. However, work order of single contract is less than Rs. 2,50,000.
Held that-
1 to 8. The benefit of exemption Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017, is available only, if the contract is either for pure service or for Composite supply of goods and services in which the value of supply of goods constitutes not more than 25% of the value of the said composite supply and on activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or to a Municipality under article 243W of the Constitution only and not in any other cases.
9. TDS is not required to be deducted on payment made to the supplier of taxable goods or services or both, only when the value of such supply under a contract does not exceeds Rs. 2.5 Lakhs.