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2022 (10) TMI 779 - AAR - GSTClassification of goods/services - rate of GST - composite supply or not - pure services or not - Design, Build, Finance, Operate and Transfer (DBFOT) of required capacity (based on total wet waste generation as on 2020 + 10%) of Municipal Solid Waste Processing facility - to be classified under Heading 9994 or not - HELD THAT:- The supply agreed to be provided by the applicant as it appears from the documents produced before us is in the nature of waste management services. It is found that ‘waste collection services’ and ‘waste treatment and disposal services’ fall under SAC 9994 having Group 99942 and 99943 respectively. Further, ‘sewage and waste collection, treatment and disposal and other environmental protection services’ is taxable @ 18% vide serial number 32 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended from time to time (corresponding West Bengal State Notification No. 1135 F.T. dated 28.06.2017). Whether the services to be provided by the applicant can qualify for exemption under the aforesaid entries of the exempt notification or not? - HELD THAT:- The applicability of serial number 3 of the notification which exempts pure services provided to the Central Government, State Government or Union territory or local 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 term ‘pure services’ has not been defined under the GST Act. However, a bare reading of the description of services as specified in serial number 3 of the said notification denotes that supply of services which does not involve any supply of goods can be regarded as pure services. The scope of work requires the applicant, inter alia, to construct sanitary landfill which involves supply of goods. Further, the applicant requires to sell and dispose of bye-products, recyclable & reusable materials (fertilizers and alternative fuel) which also involve supply of packing materials. The applicant himself has declared that the work includes packaging, distribution & sales point (for fertilizers & alternative fuel. As a result, the instant supply of services fails to qualify as pure services - The tripartite agreement refers that the rate offered in the tender shall be applicable as tipping fee per ton of processing of waste (Project component includes) which includes all type of taxes & duties and GST (Fixed). The applicant, however, has not produced before us any document in support of value of goods involved in the supply. We are, therefore, unable to determine whether the value of supply of goods constitutes not more than 25 per cent. of the value of the said composite supply or not. Whether the supply by the applicant to SUDA can be treated as a supply provided to the Central Government, State Government or local authority? - whether the same is in relation to any function entrusted to a Panchayat under article 243G or to a Municipality under article 243W of the Constitution? - HELD THAT:- The applicant has received work order for a number of municipalities in West Bengal under Swachh Bharat Mission/Mission Nirmal Bangla. The functions entrusted to a municipality under the Twelfth Schedule to Article 243W inter alia contain Public health, sanitation conservancy and solid waste management. The supply involved in the instant case is in relation to a function entrusted to a Municipality under article 243W of the Constitution. Whether the supply to be made by the applicant can be regarded as a supply to the Central Government, State Government or local authority? - HELD THAT:- The instant supply to SUDA cannot be held as supply to the government since, it is found from the official website of State Urban Development Agency www.sudawb.org that SUDA is a registered society which was formed in the year 1991 under the aegis of erstwhile Municipal Affairs Department, Govt of West Bengal with an objective to ensure effective implementation of different development programme in urban areas of the State. Undisputedly SUDA, being a registered society, is not a Panchayat or a Municipality or any Board or Cantonment as specified in the above-referred definition of local authority. Further, no documents have been produced wherefrom it can be established that SUDA is an authority who is legally entitled to and entrusted by the Government with the control or management of a local fund. Therefore, SUDA cannot be held as a local authority as defined in clause (69) of section 2 of the GST Act and the supply involved in the instant case thus fails to qualify for exemption vide serial number 3 or 3A of the Exempt Notification.
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