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2020 (11) TMI 325 - AAR - GSTClassification of services - Solid waste management - Revamping of existing dumped Garbage in compost yards by Bio-mining process - exemption under Sl. No. 3 of notifications No. 12/2017 dt 28.07.2017 as amended -liability to deduct TDS - Erode city Municipal Corporation - section 51 of CGST Act of TNGST Act, 2017 - HELD THAT - The activities undertaken by the applicant such as consolidation of waste, temporary storage of hazardous non-hazardous waste; treating and disposing the waste by processing in a facility that meets legal standards, are all covered under the group 99943. The ultimate goal of the activity is reclamation of land clear of the dump and the activity undertaken by the applicant is removal of the waste following the norms set under SWM Rules 2016. Therefore, the activity undertaken by the applicant is covered under SAC 9994 and more appropriately under the Group 99943. Whether the services provided by the applicant are exempted under Sl. No. 3 of notifications No. 12/2017 dt 28.06.2017 as amended? - HELD THAT - In the case at hand, the activity undertaken by the applicant is disposal of solid waste dumped in the specified yards and the same is Pure Service classifiable under SAC 9994, thus the first criterion is satisfied - The Erode City Municipal Corporation was formed as per the Erode City Municipal Corporation Act 2008 by the Government of Tamil Nadu. The service recipient i.e., Erode City Municipal Corporation, Erode, Tamil Nadu is a local authority. As per Section 2 clause (69) sub-clause (b) of the CGST Act, 2017 Municipality as defined in clause (e) of article 243P the Constitution is a local authority, hence the services are provided to Local Authority and the criterion related to recipient is satisfied. Whether the activity is a function entrusted to a municipality under Article 243W of the Constitution. Sl.No.6 of The Twelfth Schedule to the Constitution under Article 243 W? - HELD THAT - On a cogent reading of Sl.No. 6 of the Twelfth Schedule to the Constitution and Rule 15 of the Solid Waste Management Rules 2016, it is evident that it is the duty of the local authority to investigate, analyse the existing dumpsites for their potential bio-mining and bio-remediation and wherever feasible has to take actions to bio-mine or bio-remediate the sites under Solid Waste Management . In the case at hand the function of bio-mining and bio-remediation of the dump yard is entrusted to the applicant and therefore the final criterion is also satisfied - the exemption at Sl.No. 3 of the Notification 12/2017 dated 28.06.2017 as amended is applicable to the said services provided by the applicant to Erode City Municipal Corporation. Whether the Erode City Municipal Corporation is liable to deduct TDS as per the provisions of Section 51 GST Act 2017 for the services received by them from the applicant? - HELD THAT - The applicant supplies the service but the question raised is not on the applicability of the Notification to the applicant but the applicability of the Notification to the recipient of the services of the applicant, who is a distinct person for whom this ruling is not applicable as per Section 103 of the Act - there are no merit in the claim of the applicant in as much as the ruling, if extended also, is not applicable in respect of Erode City Municipal Corporation who is not the applicant. The questions raised is on the eligibility of the applicants to the exemptions at Sl.No. 3/3A of Notification No. 12/2017 dated 28.06.2017 and if exempted whether the notifications regarding TDS are applicable to the supply and the authority has ruled the applicability to that supply, whereas the question is on the liability of the recipient of the services who is not the applicant in the case at hand. Therefore, this question is not admissible as per Section 97 read with Section 95 of the Act and therefore not admitted.
Issues Involved:
1. Classification of the services provided by the applicant. 2. Whether the services provided by the applicant are exempted under Sl. No. 3 of Notification No. 12/2017 dated 28.06.2017 as amended. 3. Whether the Erode City Municipal Corporation is liable to deduct TDS as per the provisions of Section 51 of the CGST Act/TNGST Act, 2017. Issue-wise Detailed Analysis: 1. Classification of Services: The applicant, a service provider of Municipal Solid Waste (MSW) Management solutions, entered into an agreement with the Erode City Municipal Corporation for the disposal of approximately 560,000 cubic meters of existing waste through a bio-mining process. The applicant contended that their services fall under SAC Code No. 9994 "Sewage and Waste collection, treatment, and disposal and other environmental protection services," specifically Group 99943 "Waste treatment and disposal services." The Authority examined the activities involved, such as pre-stabilization, sorting, segregation, and disposal of waste, and concluded that the services provided by the applicant are correctly classifiable under SAC 9994, particularly Group 99943. 2. Exemption under Notification No. 12/2017: The applicant sought exemption under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, which exempts "Pure services provided to the Central Government, State Government, Union territory, local authority, or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution." The Authority confirmed that the services provided by the applicant are pure services and are provided to a local authority (Erode City Municipal Corporation). The function of bio-mining and bio-remediation of the dump yard falls under the functions entrusted to a municipality under Article 243W, specifically "Public health, sanitation conservancy, and solid waste management." Therefore, the services provided by the applicant are exempt under Sl. No. 3 of Notification No. 12/2017. 3. Liability to Deduct TDS: The applicant questioned whether the Erode City Municipal Corporation is liable to deduct TDS under Section 51 of the CGST Act/TNGST Act, 2017. During the virtual hearing, the applicant agreed that this issue is outside the purview of Advance Ruling as it pertains to the recipient of the services, not the applicant. The Authority reiterated that Advance Ruling is applicable only to the applicant and the jurisdictional/concerned officer in respect of the applicant. Therefore, the question regarding TDS deduction by the Erode City Municipal Corporation was not admitted for consideration. Ruling: 1. The service "Solid Waste Management - Revamping of Existing Dumped Garbage in Compost Yards by Bio-Mining process" provided by the applicant to the Erode City Municipal Corporation is classifiable under SAC 9994. 2. The service provided by the applicant is exempt under Sl. No. 3 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 as amended. 3. The question regarding the liability of the Erode City Municipal Corporation to deduct TDS is not admitted for consideration under Section 97 of the Act.
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