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TMI Blog2021 (9) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... o (g) of clause (69) of section 2 of the GST Acts. There are no merit in the submission of the appellant that the NAA, Vapi, like any other local body, provides municipal services in the industrial area of GIDC, Vapi, therefore, the NAA, Vapi is a local authority for the simple reason that the definition of the local authority under section 2(69) of the GST Acts do not provide so. The said definition do not provide that any authority providing municipal services can be termed as local authority . The definition of local authority under section 2(69) of the GST Acts is an exhaustive definition inasmuch as it uses the word means and not includes . Therefore, the scope of the definition cannot be expanded. As the NAA, Vapi do not fall under any of the sub-clauses of the definition of local authority , as defined in clause (69) of section 2 of the GST Acts, the same cannot be considered as local authority . It is apparent from the composition of the Board of Management prescribed under Rule 3 of Gujarat Industrial Development (Notified Area) Rules, 2007, that the Government does not have 90 per cent, or more participation by way of control on the NAA, Vapi. Further, neither the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve years, for an amount of ₹ 1,71,10,000/-. 3. The appellant raised the following question for advance ruling before the GAAR:- (i) Whether the solid waste management service provided by the applicant to Notified Area Authority, Vapi under the above referred agreement is exempted under Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017? 4.1 The GAAR examined various provisions of the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 (herein after referred to as the "CGST Act, 2017" and the "GGST Act, 2017" respectively and "GST Acts" collectively), including Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 which contains the Chapter, Section and Heading of classification of services along with GST Rate Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 which contains a list of exempted services and other relevant material. 4.2 The GAAR has observed that Entry No. 3 of Notification No. 12/2017Central Tax (Rate) dated 28.06.2017 exempts Pure Services provided to the Central Government, State Government or Union territory or local authority or a Governmental Authority or a Government Entity by way of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no supply of goods involved in this activity. Setting up of material recovery facility and Food Compost Facility operation and maintenance does not involve any transfer in goods and these are not the activities for which consideration is given by the NAA, Vapi to the appellant. Neither the agreement provides anywhere for supply of goods to the NAA, Vapi. Therefore, as per the agreement, the activities undertaken by the appellant are nothing but a pure service. 6.3 The appellant has further submitted that the GAAR has relied upon clauses of the agreement entered into between the appellant and the NAA, Vapi, wherein it is stated that the work includes all cost of collection vehicles, fuel, oil, workers, licensed drivers, tolls etc. and on the basis of this clause only it is decided that the appellant has not provided pure services to NAA, Vapi. None of the clauses of the said agreement provides that the appellant is required to supply any goods to the NAA, Vapi. The appellant has further submitted that these are expenses which are incurred by the appellant for itself for providing its output services to NAA, Vapi. The appellant has submitted that it is not the case of the GAAR tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant are not exempted under Notification No. 12/2017-Central Tax (Rate). The GAAR has not found it necessary to examine other aspects relevant for deciding admissibility of exemption under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) and it has been specifically mentioned so in the advance ruling issued by the GAAR. Even otherwise, since the issue before us is whether the service being provided by the appellant to the NAA, Vapi is covered under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) or otherwise, the issue needs to be examined in its entirety and we need not confine ourselves to only one of the facets of this case. 10. It would, therefore be appropriate to refer to the relevant entry at Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, which reads as follows :- SI.No. Chapter, Section Heading, Group, or Service Code (Tariff) Description of Services Rate (per cent) Condition (1) (2) (3) (4) (5) 3 Chapter 99 Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t specified place. The appellant is also required to deploy workers for this work to whom necessary tools and equipments are required to be provided. Thus, it cannot be said that the appellant is supplying goods to the NAA, Vapi. In fact, the appellant is required to use various goods in order to supply the service of 'point to point collection and disposal of garbage' to the NAA, Vapi. 11.4 The appellant is also required to carry out Operation and Maintenance of 'Food Waste to Compost Facility', for which it has to make required shed and deploy personnel. Here again, it appears that the appellant is required to make shed for 'Food Waste to Compost facility' and the said 'shed' is not for supply to the NAA, Vapi. 11.5 Even in case of setting up of Material Recovery Facility under DBFOOM (Design, Build, Finance, Own and Operate Model), it appears that all the equipments would be under the ownership and control of the appellant and none of the equipments would be supplied / handed over to the NAA Vapi. 11.6 The appellant has specifically submitted that setting up of material recovery facility and Food Compost Facility operation and maintenance does not involve any transfer in good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 2 of the GST Acts. 12.5.1 Further, the NAA, Vapi is neither a Municipality, nor a Municipal Committee, nor a Zilla Parishad, nor a District Board. The appellant has also not submitted any evidence so that the NAA, Vapi can be termed as 'any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund'. The submission of the appellant that the NAA, Vapi is a wing of municipal corporation, which is basically a local body established by the State Government to function as a self-government under Part-IX of the Constitution of India, is without any basis and not supported by any evidence. It appears from the copy of the agreement submitted by the appellant that the NAA, Vapi has been formed under the Government of Gujarat, Industries, Mines and Power Department's Notification No. GHU/72/66/IND/1672/2471-G dated 06.07.1972 read with Notification No. GHU:8/2008-GID:102004:1496:G dated 01.04.2008. We have perused the said Notification dated 01.04.2008 available in the public domain. However, the said Notification does not contain any specific provision which may support the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hayat, a Municipal Council or a Municipal Corporation. Further, the words in proviso a Municipality under this clause may not be constituted clearly means that the words may not be constituted used in proviso are clearly in contradistinction with the word constituted as used in Article 243P(e) and Article 243Q. Thus, notification under proviso to Article 243Q(1) is not akin to constitution of Municipality. We, thus, are clear in our mind that industrial township as specified under notification dated 24.12.2001 is not akin to Municipality as contemplated under Article 243Q." [underlining supplied] 12.5.4 Though the aforesaid judgement of the Hon'ble Supreme Court is in the context of section 10(20) of the Income Tax Act, 1961, the ratio laid down therein is equally applicable in the present case. Therefore, the NAA, Vapi cannot be termed as a "Municipality" as defined in clause (e) of Article 243P of the Constitution. 12.6 The NAA, Vapi also does not fall under any of the sub-clauses (d) to (g) of clause (69) of section 2 of the GST Acts. 12.7 We also do not find any merit in the submission of the appellant that the NAA, Vapi, like any other local body, provides municipal servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. GHU/72/66/IND/ 1672/2471-G dated 06.07.1972 read with Notification No. GHU:8/2008-GID:102004:1496:G dated 01.04.2008. Apparently, the NAA, Vapi has not been set up by an Act of Parliament or State Legislature. Obviously, an authority or entity constituted or set up under an Act of Parliament or State Legislature cannot be equated with an authority or entity constituted or set up by an Act of Parliament or State Legislature. Therefore, the NAA, Vapi does not fall under sub-clause (i) of definition of "Governmental Authority" provided at clause (zf) of Paragraph 2 of the Notification. 13.5 Though the appellant has not argued that the NAA, Vapi may fall under sub-clause (ii) of definition provided at clause (zf) of Paragraph 2 of the Notification, we have examined this aspect as well to satisfy ourselves whether the NAA, Vapi can be considered as "Governmental Authority". 13.6 The Government of Gujarat, vide Notification No. GHU:8/2008GID:102004:1496:G dated 01.04.2008 has notified the Gujarat Industrial Development (Notified Area) Rules, 2007. Rule 3 of the said Rules provide for constitution of 'Board of Management' as follows :- "3. Constitution of Board of Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3W) 1. to 5.…… 6. Public health, sanitation conservancy and solid waste management 7. to 18…….. 14.3 Thus, from the provisions of Article 243W of the Constitution of India and the matters listed in the Twelfth Schedule, it can be said that the activity of the appellant or service being provided by the appellant to the NAA, Vapi, as emerging from the copy of agreement entered into between them submitted by the appellant, is covered under activities mentioned in the Twelfth Schedule of the Constitution. 15. As the appellant has not been providing services to the Central Government, State Government or Union Territory or local authority or a Governmental authority or a Government Entity, the benefit of Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) is not admissible to the appellant even if the appellant is providing 'pure service' in relation to solid waste management which is a matter enlisted in Twelfth Schedule of the Constitution. 16. In view of the foregoing, we hold that the activities being carried out by the appellant viz. solid waste management service provided to the NAA, Vapi under the agreement, is not covered under Sr. No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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