Online tendering will be considered as supply of services: AAR
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- Last Updated on 13 September, 2021
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Case details: Maharashtra State Dental Council, In re - [2021] 130 taxmann.com 73 (AAR - MAHARASHTRA)
Judiciary and Counsel Details
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- Rajiv Magoo and T.R. Ramnani, Member.
Facts of the Case
The applicant-Maharashtra State Dental Council was not a profit making institution and the income earned by way of fees would be used for the maintenance of this council. It would provide registration to Dental graduates, regulate the profession of dentistry and also provide help, assistance and guidance for the benefit and welfare to the Dental Practitioner. It filed an application for advance ruling to determine nature of its supply related to tendering i.e. application, payment of fees, submission of technical & financial bid, etc and its classification.
AAR Held
The Authority for Advance Ruling observed that in common parlance online tendering is understood to be a process to procure goods or services where the entire process is online. As per section 2(56) of the CGST Act, 2017, ‘goods’ means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply.
From the above definition, it was clear that Online Tendering would not satisfy the definition of goods. However as per section 2(17) of the IGST Act, intangibles delivered through telecommunication networks or internet would fall under “online information and database access or retrieval services”. Therefore, the intention of the legislature was very clear, to treat such activities as supply of services and would fall under services heading 9997.
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