TMI Blog2019 (9) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... work only in terms of the quantity of the garbage lifted and removed. Based on the above documents, it may, therefore, be concluded that the Applicant s supply to HMC 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 to HMC is a function mentioned under Sl No. 6 of the Twelfth Schedule - The Applicant s service to HMC, therefore, is exempt under Sl No. 3 of the Exemption Notification. The TDS Notifications bring int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the GST Act and the Rules prescribed thereunder, and the Regulations prescribed by the West Bengal Authority for Advance Ruling Regulations, 2018. 1. Admissibility of the Application 1.1 The Applicant is stated to be providing conservancy/solid waste management service to the Conservancy Department of the Howrah Municipal Corporation (hereinafter the HMC). The HMC, however, is deducting TDS while paying consideration for the above supply in terms of Notification No. 50/2018 - Central Tax dated 13/09/2018 (corresponding State Notification No. 1344 - FT dated 13/09/2018) and State Government Order No. 6284 - F(Y) dated 28/09/2018 (hereinafter collectively referred to as TDS Notifications). The Applicant seeks a ruling on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... local authority. He submits copies of the work orders issued, specification and terms and conditions of the work etc. to establish that he supplies pure service and, therefore, the exemption under Sl No. 3 of the Exemption Notification applies to his supplies. 3. Observations and findings of the Bench 3.1 In its Circular No. 51/25/2018-GST dated 31/07/2018 the Central Government clarifies that the service tax exemption at serial No. 25(a) of Notification No. 25/2012 dated 20/06/2012 (hereinafter the ST Notification) has been substantially, although not in the same form, continued under GST vide Sl No. 3 and 3A of the Exemption Notification. Sl No. 25(a) of the ST notification under the service tax exempts services pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Exemption Notification, provided it is either a pure service or a composite supply, where supply of goods does not constitute more than 25% of the value. 3.3 The Applicant s eligibility under Sl No. 3 or 3A of the Exemption Notification should, therefore, be examined from three aspects: (1) whether the supply being made is pure service or a composite supply, where supply of goods does not exceed more than 25% of the value of the supply, (2) whether the recipient is government, local authority, governmental authority or a government entity, and (3) whether the supply is being made in relation to any function entrusted to a panchayat or a municipality under the Constitution, as clarified in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... waste management. The Applicant s supply to HMC is a function mentioned under Sl No. 6 of the Twelfth Schedule. 3.7 The Applicant s service to HMC, therefore, is exempt under Sl No. 3 of the Exemption Notification. 3.8 The TDS Notifications bring into force section 51 of the GST Act, specify the persons under section 51(1)(d) of the Act and have mandated and laid down the mechanism for deduction of TDS. These notifications, therefore, are applicable only if TDS is deductible on the Applicant s supply under section 51 of the GST Act. Section 51 (1) of the Act provides that the Government may mandate inter alia a local authority to deduct TDS while making payment to a supplier of taxable goods or services or both. As the App ..... X X X X Extracts X X X X X X X X Extracts X X X X
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