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2020 (12) TMI 748 - AAR - GSTClassification for supply of services - waste collection, segregation, treatment, transportation and disposal services under the service agreements entered with both concessionaries - Exemption under N/N. 11/2017- C.T.(Rate) dated 28th June 2017 or under entry no.3 of the Notification 12/2017-Central Tax (rate) dated 28.06.2017? - HELD THAT - The words of the entry at S.No.3 of the Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 are very clear in that the class of service providers is clearly mentioned. If the intention of the legislature is to exempt Pure Services by way of any activity entrusted to Panchayat/ Municipality under the Article 243 G /243 W of the Constitution , then the class of recipients will not be mentioned in the description as is available in certain entries of the said Notification(entry No. 23/3 (v), for example). Again if the intention of the legislature is to tax/exempt a supply when made by a Sub-Contractor, such intention is explicitly stated as available in entry 3(ix) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 as amended. Thus, it is a well settled position that the exemption notification must be interpreted on their own wordings In the case at hand, the entry at Sl.No. 3 is explicit in its application in as much as the class of recipient and the type of activities are mentioned. On plain reading of the said entry, it is specified that only services provided to Central Government, State Government or union territory or local authority or a Governmental authority will be exempted, which is not the case in hand. Therefore the supply made by the applicant under the Service Agreement is not eligible for exemption in terms of entry No.3 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017. The supply of services by the applicant relating to waste collection, segregation, treatment, transportation and disposal services under the Service Agreements entered with both concessionaries are classified under SAC 9994 in terms of Notification No. 11/2017 C.T.-(Rate) dated 28.06.2017 - The activity undertaken by the applicant under the Service Agreements entered with both concessionaries are not exempted from Goods and Services Tax in terms of entry no.3 of the Notification 12/2017- Central Tax (Rate) dated 28.06.2017.
Issues Involved:
1. Classification of services related to waste collection, segregation, treatment, transportation, and disposal. 2. Applicability of GST exemption for these services under entry no. 3 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017. Issue-wise Detailed Analysis: 1. Classification of Services: The applicant, engaged in waste management services, entered into Service Agreements with concessionaires for waste collection, segregation, treatment, transportation, and disposal in specific zones of Greater Chennai Corporation. The applicant sought to classify these services under SAC 9994 as per Notification 11/2017-C.T.(Rate) dated 28.06.2017. The services provided by the applicant include daily door-to-door waste collection, segregation, support in transportation, collection from various sources, and street sweeping. These activities fall under: - SAC 999423/999424 for general waste collection services. - SAC 999431 for waste preparation, consolidation, and storage services. - SAC 999451 for sweeping and snow removal services. The Authority confirmed that the services supplied by the applicant are classifiable under SAC 9994 of the Annexure to Notification No. 11/2017-C.T.(Rate) dated 28.06.2017. 2. Applicability of GST Exemption: The applicant claimed that their services should be exempt from GST under entry no. 3 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017, which exempts "Pure services provided to the Central Government, State Government, Union territory, or local authority by way of any activity in relation to any function entrusted to a Municipality under article 243W of the Constitution." The applicant argued that: - The services provided are "Pure Services." - Greater Chennai Corporation (GCC) is a local authority. - The services are related to functions entrusted to a Municipality under Article 243W. - The exemption should apply to services provided to the concessionaires as they are ultimately for GCC. However, the Authority noted that: - The Service Agreements were with concessionaires, not directly with GCC. - The concessionaires are registered companies and do not belong to the specified class of service recipients (Central Government, State Government, Union territory, or local authority). - The services provided by the applicant are not directly to the local authority but to the concessionaires. The Authority concluded that the exemption under entry no. 3 of Notification 12/2017-C.T.(Rate) dated 28.06.2017 does not apply to the applicant's services as the recipient of the services is not GCC but the concessionaires. Ruling: 1. The supply of services by the applicant relating to waste collection, segregation, treatment, transportation, and disposal services under the Service Agreements entered with both concessionaires are classified under SAC 9994 in terms of Notification No. 11/2017 C.T.-(Rate) dated 28.06.2017. 2. The activity undertaken by the applicant under the Service Agreements entered with both concessionaires is not exempted from Goods and Services Tax in terms of entry no. 3 of the Notification 12/2017-Central Tax (Rate) dated 28.06.2017.
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