2024 (2) TMI 1352 - AAR - GST

Classification of the services provided by the applicant - bio-mining and waste remediation services - applicant who are into Solid Waste Management services, has been assigned with the task of Remediation of open dump and reclamation of open dump and reclamation of space at Ajjagondanahalli, Tumakuru - services provided by the applicant are exempted under SI. No. 3 of Notification No. 12/2017 dated 28.07.2017 as amended or not - service recipient i.e., M/s. Tumkur Smart City Corporation is a Governmental Authority as per the definition of Notification No. 12/2017-CT dated 28.06.2017 or not. Classification of the services provided by the applicant - HELD THAT - 'Site remediation' in the instant case gets covered under Group 99944, and more specifically under SAC 999441, as the applicant is assigned with the task of Remediation of open dump and reclamation of open dump and reclamation of space at Ajjagondanahalli, Tumakuru . However, the objective of the project is not just land reclamation but also bio mining of waste, which involves processing of waste and disposal of the same as well. Therefore, this part of the operation gets covered under Group 99943, and more specifically under SAC 999433, which relates to 'Non-hazardous waste treatment and disposal services'. Accordingly, we are of the opinion that broadly, the entire operation undertaken by the applicant in this case gets covered under SAC heading 9994, attracting 18% GST. Whether services provided by the applicant are exempted under SI. No. 3 of Notification No. 12/2017 dated 28.07.2017 as amended? - HELD THAT - The service 'Site remediation and bio mining of waste', docs not fall under the category of cither Works Contract', or 'Composite supplies'. Further, as no supply of any goods is involved in the instant case, and as said operation gets carried out by deployment of manpower/labour, it is clear that the service rendered by the applicant qualifies as 'pure services' - By virtue of Government Notification No. HUD 474 MLR 95, dated 10.10.1995, Tumkur was specified as City Municipal Council Area , and vide Notification No. UDD 154 MLR 2013, Bangalore, Dated 20.12.2013, Tumkur was specified as a Larger Urban Area and Tumkur Corporation was established. Accordingly, we find that the city of Tumkur, (now Tumakuru) was already a Municipality which later attained the status as a Municipal Corporation. Tumakuru has also been identified as one among the 100 cities in India to be covered under the 'Smart Cities Mission' launched by the Government of India. Therefore, the Tumakuru City Corporation qualifies as a Local Authority . Whether the activity is a function entrusted to the Municipality under Twelfth Schedule to Article 243W of the Constitution? - HELD THAT - The services rendered by the applicant in the instant case happens to be 'Pure Services' provided to Tumakuru City Corporation which is a 'Local Authority', by way of any activity in relation to any function entrusted to a Municipality under article 243W of the Constitution. Accordingly, we conclude that the services provided by the applicant to the Tumakuru City Corporation is exempted under SI. No. 3 of Notification 12/2017 dated 28.07.2017, as amended. Whether the service recipient i.e., M/s. Tumkur Smart City Corporation is a Governmental Authority as per the definition of Notification No. 12/2017-CT dated 28.06.2017? - HELD THAT - In view of the fact that M/s. Tumkur Smart City Limited is neither the service provider, nor the service receiver in the instant case, and that the same is only a special purpose vehicle to facilitate the Parties (the applicant, and M/s. Tumakuru City Corporation) for seamless execution of the project - The question is not covered under Section 97(2) of the CGST/TNGST Act, 2017, in respect of which an applicant can seek advance ruling and hence this authority refrains from giving any ruling in this regard.

Summary

Issues Involved:
1. Classification of services provided by the applicant.
2. Exemption of services under SI. No. 3 of Notification No. 12/2017.
3. Status of M/s. Tumkur Smart City Corporation as a "Governmental Authority".

Summary of Judgment:

1. Classification of Services:
The applicant, a GST Registrant, provides services related to Municipal solid waste management solutions, specifically "Remediation of open dump and reclamation of space at Ajjagondanahalli, Tumakuru" through bio-mining. The service is classified under SAC 9994, which includes "Sewage and waste collection, treatment and disposal and other environmental protection services," attracting GST at 18% (9%-CGST + 9% SGST, or 18%-IGST).

2. Exemption Under SI. No. 3 of Notification No. 12/2017:
The services provided by the applicant qualify as "pure services" and are provided to Tumakuru City Corporation, a "local authority." These services fall under the functions entrusted to a Municipality under Article 243W of the Constitution, specifically "Public health, sanitation conservancy and solid waste management." Therefore, the services are exempted under SI. No. 3 of Notification No. 12/2017 - CT dated 28.06.2017, as amended.

3. Status of M/s. Tumkur Smart City Corporation:
The query regarding whether M/s. Tumkur Smart City Corporation is a "Governmental Authority" was not addressed. The authority determined that M/s. Tumkur Smart City Limited is a Special Purpose Vehicle (SPV) created to facilitate the project and is neither the service provider nor the service recipient in this case. Consequently, this query does not merit consideration and is not covered under Section 97(2) of the CGST/TNGST Act, 2017.

Ruling:
(i) The service provided by the applicant, i.e., bio-mining of waste and remediation of the site, is classified under SAC 9994, attracting GST at 18%.
(ii) The service provided to M/s. Tumkur City Corporation is exempted under SI. No. 3 of Notification No. 12/2017 - CT dated 28.06.2017, as amended.
(iii) The query regarding the status of M/s. Tumkur Smart City Corporation is not covered under Section 97(2) of the CGST/TNGST Act, 2017, and hence no ruling is provided.