GST is not exempted on Manpower services to Hospital-cum-General Medical College & State University

According to the AAR, the services provided by the applicant, i.e. Man Power services to Hospital – cum – General Medical College and State University do not qualify for exemption.

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, HARYANA

Background

As per statement of facts submitted by the applicant, M/s Oscar Security & Fire Service (applicant) is an outsourcing agency providing man power services i.e. security housekeeping, for Indian government departments and highly sensitive industrial installations like massive petrol depots, nuclear power plant, telecom tower infrastructure, thermal power plant and many more.

Questions on which Advance Ruling is sought:-

The applicant M/s Oscar Security & Fire Service is providing Man power services to Hospital cum General Medical College and State University (Education Institutions). In both education institutions they have raised service invoices with service tax from 01.04.2017 to 30.06.2017 and GST from 01.07.2018 onwards. Both the departments are saying that they are exempted as per GST notifications and Law. Accordingly one of the department issued a letter stating that all medical education institutions are not liable to pay GST under section 9992 vide Notification No. 12/2017 of dated 28.06.2017.

Therefore, clarification is sought on the same in written context that education or medical institutions and state university (Institutions providing Graduate Courses) are exempted or not.

Comment of the Officer

In terms of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, education services are taxable as per Sr. No.30-Heading 9992 (education services) and as per Sr. No. 66 Heading 9992 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended), the following services will attract nil rate of tax,-

“.. (b) Services provided to an educational institution, by way of,-

• transportation of students, faculty and staff;
• catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union Territory;
• security or cleaning or housekeeping services performed in such educational institution
• services relating to admission to, or conduct of examination by, such institution; up to higher secondary: Provided that nothing contained in entry (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent; “

From the foregoing, it is learnt that security services provided to an educational institution up to higher secondary school level only would attract nil rate of tax.

Since the party is supplying manpower services to the medical institutions and state universities, they are liable to pay GST on supply of such services.

Discussion and finding of the authority

To understand the question raised by the applicant it is imperative to have a reference to the relevant notification.

Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 and its corresponding notification No. 46/ST-2 Dt. 30.06.2017 under the SGST Act 2017 provides for rate of tax on supply of various services. Education services attract GST @ 18% (9% CGST+9% SGST).

Advance ruling under section 98 of the CGST/SGST Act 2017

In the backdrop of above discussion and findings, the Rule was laid down as under: –

“The services provided by the applicant, i.e. Man Power services to Hospital – cum – General Medical College and State University do not qualify for exemption under Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and corresponding notification No. 47/ST-2 Dt. 30.06.2017 of the State Tax.”