Name of the Applicant:

Maharashtra State Dental Council

Appeal No.:

GST-ARA-125/2019-20/B-30

Ruling pronounced by:

GST AAR Maharashtra

Date of Ruling:

13-07-2021

• The applicant “Maharashtra State Dental Council” is a non-profit-making organisation which earns income by way of fees received from dental graduates and used for maintenance of the council.
• Every aspect of applicant’s activity is controlled and processed by the Government through Dental Act, 1948 as well as Bombay Dentists Rules, 1951.
• It is constituted by an Act of the Parliament “The Dentists Act, 1948”, with a view to regulate the dental profession and dental ethics.

Question

Observations

Ruling

Whether online tendering to be considered as supply of goods or supply of services

• Online Tendering is “an internet-based process wherein the complete tendering process from advertising to receive and submit tender-related information are done online.
• Online Tendering does not satisfy the definition of ‘Goods’.
• Section 2(17) of IGST Act, 2017 defines ‘Online Information and Data Access or Retrieval services’ which means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology.
• E-tendering, which is intangible has to be delivered through telecommunication network or internet. Thus, the intention of the legislature is very clear, to treat such activities as supply of services.

Online Tendering will be considered as “Supply of Services”.

Whether offline tendering to be considered as Supply of Goods or Supply of services

• In offline tendering, all the process related to tendering like application, payment of fees, submission of technical & financial bid etc. are generally done manually by submission of hard copies.
• The definition of ‘services’ mentioned in the Business Dictionary: “Intangible products such as accounting, banking, cleaning, consultancy, education, insurance, expertise, medical treatment or transportation.”
• Sometimes services are difficult to identify as they are closely associated with a goods: such as the combination of a diagnosis with the administration of a medicine. No transfer of possession or ownership takes place when services are sold.
• Hence, offline tendering, will be considered as rendering of services.

Offline Tendering, in its entirety involving sale of form, payment of tender fees and submission of bid documents etc. will be considered as “Supply of services”.

Under which tariff head the “online tendering” should be taxed

• GST Tariff for services comprises of Chapter-99- Headings 9954 to 9999.
• Online tendering is not specifically mentioned in any of the headings and therefore it is felt that the appropriate heading in this case would be Heading 9997 which covers other services (……. Other miscellaneous services including services nowhere else specified)

Online Tendering should get taxed under heading 9997.

Under which tariff head the ‘Offline Tendering’ should get taxed

• GST Tariff for services comprises of Chapter-99- Headings 9954 to 9999.
• Online tendering is not specifically mentioned in any of the headings and therefore it is felt that the appropriate heading in this case would be Heading 9997 which covers other services (……. Other miscellaneous services including services nowhere else specified)

Offline Tendering should get taxed under heading 9997.

If tendering is service then whether it will be considered as administrative services or specific services

• This specific question does not fall under the clauses mentioned in Section 97(2) of the CGST Act.
• We have already held that both online and offline services are classifiable under service Heading 9997 as “Other Miscellaneous services including services nowhere else specified”.

Tendering will be considered as ‘miscellaneous services including services nowhere else specified.”

Whether the activities conducted by the Maharashtra State Dental Council are the “Registration Activities and their related activities laid down in the Act” exempted under Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 and consequently the receipt of registering fees paid under Rule 73 of the Bombay Dentists Rules, 1951 by the prospective Dental Practitioners to the Council is exempted under GST

• Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 exempts the intra-supply of services of description as specified in column (3) of the Table mentioned therein from the payment of GST.
• The services, mentioned in the subject application, as rendered by the applicant does not specifically find mention in the said notification.
• Hence in our view the activities of the applicant are not exempted under the said notification.

The Receipt of Registering fees by the applicant is not exempted from the levy of GST.