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2020 (12) TMI 189 - AAR - GSTExempt service or not - waste disposal activities - pure services or not - conservancy service to Station Commander, Bagrakot Military Station, Office of Chief Medical Superintendent N.F. Railway, Alipurduar Junction and Sukna Military Station - Sl No. 3 or 3A of Notification No. 12/2017 Central Tax (Rate) dated 28/06/2017 (corresponding State Notification No. 1136 FT dated 28/06/2017) - HELD THAT - In the work orders issued to the applicant, the recipient describes the nature of the work as removal, collection and disposal of garbage, rubbish, filth etc., sweeping and clearing of roads, drains and open areas, cutting and pruning of tree including removal of undergrowth and foliage on drain and roads, and lifting of dead animals. The applicant performs waste disposal activities by engaging garbage lifting vehicles and other cleaning equipment. There is, however, no reference to any supply of goods in the course of executing the work. The vehicles used and the fuel consumed and the machinery used do not result in any transfer of property in goods to the recipient. Based on the above documents, it may, therefore, be concluded that the applicant s supply to the recipient is a pure service. Furthermore, Article 243W of the Constitution that discusses the powers, authority and responsibilities of a municipality, refers to the functions listed under the Twelfth Schedule as may be entrusted to the above authority. Sl No. 6 of the Twelfth Schedule refers to public health, sanitation, conservancy and solid waste management - The applicant s supply is a function mentioned under Sl No. 6 of the Twelfth Schedule. The Applicant s supply to Bagrakote and Sukna Military Stations, therefore, is exempt under Sl No. 3 of the Exemption Notification. As no agreement is available regarding supplies to the Railways, this authority offers no comment thereon.
Issues Involved:
1. Admissibility of the Application 2. Interpretation of Exemption Notification for conservancy services provided to government entities Admissibility of the Application: The Applicant sought a ruling on whether the supply of conservancy services to specific entities was exempt under the Exemption Notification. The application was deemed admissible under section 97(2)(b) of the GST Act as the concerned revenue officer did not object to its admission. Interpretation of Exemption Notification for conservancy services provided to government entities: The Applicant argued that the conservancy services provided to government entities fell under the exemption criteria of the Exemption Notification. The Bench analyzed Circular No. 51/25/2018-GST, which clarified the continuation of service tax exemptions under GST for services related to public health, sanitation, conservancy, etc., provided to the government. The Circular highlighted that services related to functions entrusted to municipalities were eligible for exemption under the Exemption Notification. The Bench emphasized that the Applicant's supply should be examined based on whether it constituted pure service or a composite supply, the nature of the recipient, and if the supply was in relation to functions entrusted to a municipality under the Constitution. The analysis of the work orders revealed that the Applicant's services were pure services without any significant supply of goods, aligning with the exemption criteria. The ruling concluded that the Applicant's supply to specific military stations was exempt from GST under the Exemption Notification. However, as no agreement was provided for supplies to the Railways, the ruling was limited to the military stations mentioned. In summary, the judgment clarified the admissibility of the application and interpreted the Exemption Notification to exempt conservancy services provided to government entities based on specific criteria outlined in the Circular and constitutional provisions related to municipal functions.
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