The Telangana Appellate Authority of Advance Ruling (AAAR) has ruled that Goods and Service Tax (GST) is applicable on e-procurement transaction fee collected on behalf of the state government.
The bench of Sandeep Prakash and S.A.M Rizvi while upholding the AAR’s ruling has observed that the -Procurement transaction fee collected on behalf of ITE&C Department towards online tenders’ results in supply within the meaning of supply as defined in CGST Act.
The appellant, M/s Telangana State Technology Services Limited(TSTSL) Telangana State Public Sector Undertaking and TSTSL is a Service Agency to the Telangana Government and its Departments Relating to Information Technology and its related services.
One of services provided by TSTSL is, acting as a fund manager on behalf of IT E&C Department, Telangana State in executing -procurement process as per Government the information was issued by Technology, Electronics & Communications Department.
As per the guidelines issued through above stated GO, TSTSL as fund manager receives entire amounts lie e-Procurement Transaction charges) into a designated Bank Accounts On receipt of the Procurement Transaction Fees (inch of GST), TSTS is paying GST 18%on the entire e Procurement Transaction Fees on monthly basis And ISTS recognizes its share of Service Charges 45 and again pays GST @18% on monthly basis. The balance amounts are utilizing IT expenditure towards the specific requirements of the Concerned Departments of Telangana State.
The appellant is of the opinion that he is acting as a pure agent on behalf of the State government which is floating tender’s amounting to supply of services and such supply may not attract tax under CGST Act, 2017.
The AAAR upheld the order passed by the Authority for Advance Ruling.
Ruling Details
Appellant Name: Telangana State Technology Services Limited (TSTSL)
Date: 20.02.2025
