9911796707
TMI Blog2022 (8) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... thur, Chennai, Tami Nadu. 600 099. (hereinafter called the Applicant) are registered under GST with GSTIN 33BYXPS6648Q2ZZ. The applicant has sought Advance Ruling on the following questions: 1. What is the classification of the service viz., "Maintaining the micro-compost centres and processing the wet waste provided by the Greater Chennai Corporation at designated locations in Center Region Zones 7, 9 & 10" in Chennai? 2. Whether the aforesaid service provided by the Applicant is entitled to exemption under Serial No 3 of Notification No 12/2017-Central Tax (Rate)., dated 28/07/2017, as amended from time to time? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs.5,000/ - each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that the Greater Chennai Corporation (hereinafter referred as GCC) had floated a tender for "Maintaining the Micro Compost Centres and Processing the Wet Waste provided by the GCC at the designated locations for a period of 3 years in Center Region Zones 7, 9 and 10 in Chennai City" with the reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l had approved the award of work of "Maintaining the Micro Compost Centres and Processing the Wet Waste" provided by Greater Chennai Corporation at designated locations in Center Region Zones 7, 9 & 10" to the Applicant at the quoted processing fees of Rs. 1690/- PMT and for a total contract value of Rs. 9,09,36,027.50/-for a period of three years subject to the conditions stipulated thereunder; The relevant conditions, for the purposes of the present application, are that: * They should maintain and process the wet waste design capacity of 49.14 MT/day at 45 locations of Center Region Zones 7, 9 & 10. * They should deploy the working force as per the RFP condition and commence the processing work within 3 days from the date of take-over of the micro-composting centres. Processing should be free from odour and also assure security for the micro composting center including all assets. Eco friendly and non-polluting process in order to reduce the impact of the processing site in the adjacent areas. * The process should be free from emission, pollution, and contamination of the environment including atmosphere, air, water and earth including control of dust and noise pollution a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Municipal Corporation Act, 1919 (as amended) provides the basic statutory authority for the administration now. Madras Municipal Corporation Act, 1919 was rechristened by The Tamil Nadu Act of 1996 as the Chennai City Municipal Corporation Act, 1919. Hence, Greater Chennai Corporation is a "municipality" as defined under Article 243-P(e) read with Article 243Q. Therefore, the second pre-condition for entitlement to the exemption under Serial No 3 of Notification 12/2017-Central Tax (Rate) is satisfies and the supply rendered to a "local authority". * Article 243W of the Constitution, provides for the powers, authority and responsibilities of municipalities. It states that, subject to the other provisions of the Constitution, the Legislature of a state may, by law, endow the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to (i) the preparation of plans for economic development and social justice; and (ii) the performance of fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copies raised on GCC by applicant 3.2 The applicant made the following submissions vide their leter dated 30.05.2022. * write up on the activities undertaken by the applicant: Step Process (1) The organic wet waste collected by the Greater Chennai Corporation(GCC) is unloaded in the corporation's micro compost centers. The Wet waste mostly comprises of vegetables, fruits, leaves, egg shells and food discards. (2) As the Wet waste immediately decomposes, it is forthwith taken into processing by the labourers of the applicant. (3) The Wet waste is shredded in the Shredding machine provided by the GCC. (4) Post Shredding, the shredded wet waste is dumped in the compost pits (5) Cow dung solutions is added into the compost pits to aid the decomposition process (6) The Wet waste undertakes decomposition in the compost pits for a period of 45 days. (7) During the 45 days period the waste in the compost pit is stirred and cow dung solution is added once every 15 days. (8) After 45 days, the wet waste would have decomposed into organic compost manure. (9) The compost manure is taken out of the pit (10) The compost manure is sieved and dried (11) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... locations in Center Region Zones, 7, 9 and 10 in Chennai. The applicant is before us seeking ruling on the following questions: (1) What is the classification of the service viz., "Maintaining the micro-compost centres and processing the wet waste provided by the GCC at designated locations in Center Region Zones 7, 9 & 10 in Chennai? (2) Whether the aforesaid service provided by the Applicant is entitled to exemption under serial No.3 of Notification No.12/2017-Ceentral Tax (Rate), dated 28/07/2017, as amended The questions raised relates to classification of services being supplied and the applicability of a notification to such supply, which are within the ambit of this authority as per Section 97 (2) of the CGST/TNGST Act, 2017 and the application is therefore admitted. 7.1 We find that the applicant has entered into an agreement with GCC and the work order S.W.M.C.No. A7/0108A/2020 dated 23.07.2020 is issued by GCC to the applicant for "Maintaining the Micro Compost Centres and Processing the Wet Waste" provided by Greater Chennai Corporation at designated locations in Center Region Zones 7, 9 & 10 at the quoted processing fees of Rs. 1690/- PMT and for a total contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Zone-9, a bill for the month of December 2021 to March 2022, with overall abstract Month-wise and Tonnage of waste processed. The bill is supported with break-up of Month-wise, Unit-wise/Division-wise(Area-wise), Tonnage handled. The service charges are arrived at based on the tonnage of waste handled and GST is not charged on the service charges billed. 8. With the above factual position, the first question raised by the applicant on classification of the activity is taken up for discussion. Scheme of Classification of Services is provided in the Annexure to Notification No. 11/2017-C.T.(Rate) dated 28.06.2017. SAC 9994 as given in the said Annexure is extracted below: 629 Heading 9994 Sewage and waste collection, treatment and disposal and other environmental protection services 630 Group 99941 Sewerage, sewage treatment and septic tank cleaning services 631 999411 Sewerage and sewage treatment services 632 999412 Septic tank emptying and cleaning services 633 Group 99942 Waste collection services 634 999421 Collection services of hazardous waste 635 999422 Collection services of non-hazardous recyclab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at under Article 243 G of the Constitution * Municipality under Article 243 W of the Constitution The first criteria to be satisfied is that the services rendered should be 'Pure services' falling under Service Code 99, in the instant case as it can be seen from the facts listed at para 7 above the applicant is obligated to maintain the Micro compost Centres and process the wet waste provided by GCC using his work force and the GCC will support with the input requirements and facilitate with the required infrastructure. The applicant using the requisite manpower will maintain the micro-compost centers, process the wet-waste supplied by GCC and handsover all the by-products of Manure to GCC. The billing is also based on the tonnage of waste handled by them. The focal point of the activity rendered in the instant case is that the applicant process the wet-waste for the manure which is given to GCC and the applicant is paid for such processing of waste, which amounts to providing `pure services' falling under Service Heading 9994. Thus, the first condition stands satisfied. 9.2 The service is provided based on the agreement entered into by the applicant with the GCC da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is evident that it is the duty of the local authority to effectively handle 'Solid Waste Management'. In the case at hand GCC for 'Solid waste management' has offered the service of the maintenance of Micro composting center to the applicant through the bid process and therefore the final criterion is also satisfied. 10. Based on the above, we find that the work order received from GCC to the applicant for maintenance of the Micro Compost Centres is "Pure services' rendered to a GCC, a local authority and the said service are activities entrusted to a municipality under Article 243W of the Constitution. Hence, the applicant is eligible for exemption from GST vide SI.No.3 of Notification 12/2017-CT. (Rate) dated 28.06.2017(as amended). The central jurisdictional authorities has made reference to ruling issued by TN AAAR in the case of SUMEET FACILITIES Ltd. and has stated that the exemption claimed is not available to the applicant. In the case referred the services were provided by M/s. Sumeet Facilities Ltd to the concessionaries(who did not satisfy the condition of being a 'Central Government or State Government or Local authority') and not to GC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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