2019-VIL-439-CESTAT-MUM-CU

SGST AAAR

GST – Telangana AAAR - Scope of words ‘in relation to’ function entrusted to a Municipality under article 243W of the Constitution - Appellant-M/s. Hyderabad Metropolitan Water Supply and Sewerage Board paid Medical insurance premium to provide health Insurance to the employees, pensioners and their family members and Vehicle insurance Policy taken to provide Insurance to the vehicles owned by the Board – Whether Medical insurance premium taken to provide health Insurance to the employees, pensioners and their family members and to insure the vehicles owned by the Board eligible for exemption as mentioned in Entry No. 3 of the Notification Number 12/2017 - Central Tax (Rate), dt 28th June, 2017 – HELD - The insurance supplies made to the board for its employees and their family members are not in relation to any function entrusted to the municipality - The word ‘in relation to’ will include only functions which are in direct relation to the entry like water supply and sewerage’ - The insurance services for employees and employees family members received by the appellant is not in direct and proximate relation to water supply and sewerage related function entrusted under Article 243W, hence the supply received by the applicant does not fall under Sl. No 3 of notification no 12/2017-CT(R) and are not exempted – insurance services to vehicles which are used for transportation of water and sewerage management, since these vehicles are essential for performing the functions as entrusted in 243W of the constitution. The applicant is eligible for exemption under the entry Sl. No 3 of Central tax (rate) notification no 12/2017 – However, in view of the amendment omitting the word ‘Government authority’, the services provided to the applicant are not eligible for exemption under Sl. No 3 of Notification no 12/2017-CT(R) w.e.f. 01.01.2022 - The order passed by the lower authority is upheld and the appeal is rejected

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