Ambulances Services to MCGM is not taxable under GST
Fact and Issue of the case
The submissions made by M/s Geetee Travels Private Limited, the applicant are as under:
The applicant is engaged in the business of tours and travels and carries on the business as package tour operators, daily passenger service operators, travel agents, etc and is also engaged in running of buses, conveyances of all kinds and to transport passengers.
Since their vehicles are supplied for transportation of passengers and other allied activities, the applicant feels that, the rate of tax applicable on supplies of vehicles for transportation of passengers and other allied activities is 12% as per Notification No. 11/2017-C.T(Rate) dated 28.06.2017, as amended vide Notification No. 20/2017-C.T(Rate) dated 22.08.2017. The applicant has entered into the contract with “MUNICIPAL CORPORATION OF GREATER MUMBAI (MCGM), Worli, Mumbai – 400018 to provide AC SUV and Innova equivalent car services for carrying COVID 19 patients for medical treatment. The MCGM is of the opinion that, services provided by way of supplies of vehicles for carrying COVID patients for medical treatment is exempted services and covered under Sr. No. 3 of Notification No. 12/2017 which provides exemption to, “Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the central Government state Government or union territory or local authority or a governmental authority by way of any activity in relation to any function entrusted to a panchayat under article 243G of the constitution or in relation to any function entrusted to a Municipality under article 243W of the constitution”.
Further, supplies of vehicles for carrying COVID patients for medical treatments would fall under entry no. 6 of twelfth schedule, Article 243W of the constitution which is reproduced as “Public health, sanitation conservancy and solid waste management”. Thus since this is pure service which is in relation to public health, it would be exempted under GST law. The applicant is treating supply of vehicles for carrying COVID patients for medical treatment as taxable service, and charged tax on commercial invoices as per Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017 as amended, if any.
Observation of the court
The tribunal has gone through the submissions made by the applicant as well as the department, perused the documents on record and facts of the matter. The applicant has submitted that they are providing Toyota lnnova Or Equivalent Vehicles (6 Seater) Registered In Tourist Category with All India Tourist Permit provided to the Municipal Corporation of Greater Mumbai (MCGM), to carry Covid 19 Patients for Medical Treatment. Their query is whether such supply would be considered as taxable supplies or exempted supplies.
During the course of the hearings, the applicant was specifically asked to produce relevant documents i.e. contract, Tax invoices, copy of tender and any other relevant available record.
The applicant has only produced one Letter of Intent (LOI) issued by MCGM which is seen to be addressed to the Federation of Taxi Operators (FTTO) and not to the applicant. The said LOI is addressed to the FTTO, c/o M/s. Geete Tours Private Limited (applicant). This would mean that, the offer was made by MCGM to the FTTO, which is a different entity as compared to the applicant. The LOI also mentions that payments would be made by MCGM, in the name of the member of federation after receiving relevant bills along with record such as log sheets duly signed and completed and utilization certificate from user department. Those sheets and utilization certificate from the user department are not produced before us by the applicant and therefore, the view taken by the jurisdictional officer that, the applicant supplied services to the federation and the federation in turn supplied to the Municipal Corporation gains strength.
The applicant has also submitted a copy of a ‘SERVICE PURCHASE ORDER’ No.4800539721 dated 25.06.2020, issued by the MCGM to the applicant, wherein under the head Material/Description, “Adv for ambulance like lnnova covid 19” is mentioned.
The jurisdictional officer, in his submissions has referred to a sample Tax invoice bearing No. 577 dated 01.08.2020 wherein it is mentioned that charges are levied for carrying Covid -19 suspected patients and details as per duty slip and annexure are attached and from the same it is seen that the applicant has also charged GST @12%. However, said attachment and annexure have not been produced before us.
The subsequent issue raised by the jurisdictional officer is that, in the subject case, there is a mixed supply of services to MCGM by the applicant. It appears that the officer has relied on the contents of one invoice to arrive at this conclusion. According to the jurisdictional officer, the said invoice also carries the sub head charges like : Fixed charges ; Toll parking ; Driver allowance; Night allowance. We do not agree with the submissions made by the jurisdictional officer on this count. The Toll charges, driver allowance, etc are in the form of additional charge where the main and only supply is renting of Innova Vehicles by the applicant to MCGM.
The applicant has submitted that in the subject case, the exemption would be available to them as per the provisions of Entry No. 3 of Notification No. 12/2017-CTR which provides an exemption from GST in respect of pure services supplied to Governmental Authority, by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or to a Municipality under article 243 W. We have no doubt that the applicant’s case is that of renting/leasing of vehicles along with drivers and would be covered under pure services. From the facts of the matter it is also seen that the said pure services are supplied to the MCGM, Mumbai which can be considered as a local authority in view of the definition of the term “Local authority” as defined in clause (69) of section 2 of the CGST Act, 2017. We now need to address the question whether the pure services supplied by the applicant to the local authority can be considered as an activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or to a Municipality under article 243 W of the Indian Constitution.5.7.3 The applicant has submitted that the subject supplies of vehicles for carrying COVID patients for medical treatments would fall under entry no. 6 of twelfth schedule article 243W of the constitution i.e. “Public health, sanitation conservancy and solid waste management”.
We find that even though the applicant has submitted that the subject supplies would fall under entry no. 6 of twelfth schedule article 243W of the constitution i.e. “Public health, no evidence or documents have been submitted to substantiate their claims for exemption. Further, the only ‘SERVICE PURCHASE ORDER’, mentioned at 5.4 above, submitted by the applicant mentions the description of service as “Adv for ambulance like Innova covid 19”. The applicant has not submitted that they have provided ambulance service for the covid patients. Neither have they submitted anything on record to show that the Innova vehicles supplied by them have been converted into ambulances or registered as such, nor have they submitted proof of having transported only covid 19 patients for medical treatment. Further, the vehicles are not registered with RTO for the use as the Ambulance and they are registered as tourist vehicles.
Finally, we also observe that, in its Circular No. 51/25/2018-GST dated 31/07/2018 the Central Government clarified that the service tax exemption at Sr. No. 25(a) of Notification No. 25/2012 dated 20/06/2012 (hereinafter referred to as the ‘ST Notification’) has been substantially, continued under GST vide Sr No. 3 and 3A of the Exemption Notification. Sr. No. 25(a) of the ST notification under the erstwhile service tax laws, exempted “services provided to the Government, a local authority or a governmental authority by way of water supply, public health, sanitation, conservancy, solid waste management or slum improvement and up-gradation.” The Circular further explains that in relation to the specific issue of ambulance service to the government by a private service provider such service is a function of ‘public health’ entrusted to Municipalities under Art 243W of the Constitution, and, therefore, eligible for exemption under SI No. 3 or 3A of the Exemption Notification. However, it is once again reiterated that the applicant has not produced any documents or evidence to show that ambulance services are supplied by them to MCGM.
In view of the above, we find that the said supply does not satisfy the provisions of Entry No 3 of Notification no. 12/2017-C.T. (Rate) dated 28th June, 2017 as amended and therefore cannot be treated as exempted. Therefore the same is liable to tax under the Notification No. 11/2017-C.T. (Rate) dated 28th June 2017, as amended.
For reasons as discussed in the body of the order, the questions are answered thus –
Question:- Whether Toyota Innova Or Equivalent Vehicles (6 Seater) registered in Tourist category with All India Tourist Permit provided for carrying Covid 19 patients for Medical Treatment would be considered as Taxable Services Or Exempted Services?”
Answer: – In view of the above discussions, the impugned services would be considered as taxable services and not exempted services.