9911796707
TMI Blog2020 (12) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... 57 (hereinafter called the 'Applicant') is registered under the GST Vide GSTIN 33AACCS3411J1ZP. They are engaged in supplying services of Waste Management, Mechanized Road Sweeping, Business Support Staffing and other services relating to Integrated Facility Management. They have sought Advance Ruling on the following questions: 1. What is the classification for supply of services by the Applicant relating to waste collection, segregation, treatment, transportation and disposal services under the service agreements entered with both concessionaries in terms of notification 11/2017- C.T.(Rate) dated 28th June 2017? 2. Whether the activity of waste collection, segregation, treatment, transportation and disposal services carried out by the Applicant under the Service Agreements entered with both concessionaries is exempted from Goods and Services Tax in terms of entry no.3 of the Notification 12/2017-Central Tax (rate) dated 28.06.2017? 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 T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance, consent, operate and maintain the project and to exercise and enjoy the rights, powers, privileges, authorisations and entitlements as set forth in the said concession agreements. The obligations and activities to be carried out by the concessionaries are as below: * Daily door to door/primary collection, segregation and transportation of the solid waste * Collection and transportation of solid waste from canal/river banks * Collection and transportation of waste from Bulk Generation * Collection and transportation of Horticulture and Garden waste from public places * Street sweeping, collection and transportation of solid waste * Creating awareness about waste collection and disposal in the citizens of the project area by way of education and other programmes Further, the applicant has stated that the concessionaires are responsible for procuring waste transport vehicles, cleaning/sweeping machinery and related consumables. The Concessionaries are to create/construct following project activities- Data Control room, Call Centre, Workshops, Parking sheds, Eco friendly charging points for e-rickshaw. The applicaiii has stated that the authority shall appoint the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be performed by the Concessionaires under the Concession Agreements. Though, two separate service agreements have been entered into between each of Concessionaire and the Applicant, various clauses relating to duties, responsibilities and the work to be done by each of them is same and identical. 2.4 The Obligations and activities to be carried out by the Concessionaires to the Authority are as under ♦ To procure and deploy complete infrastructure requested by the Authority including but not limited to vehicles along with e-rickshaws and cleaning machinery and its maintenance from time to time. ♦ To deploy drivers and operators for waste transport vehicles and cleaning machinery except e- rickshaws drivers. ♦ To provide fuel for waste transport vehicles, carry out repairs and maintenance and insurance waste transport vehicles along with e-rickshaws and cleaning machinery. ♦ To create, construct, operate and maintain the Project Facilities as per the Concession Agreement. ♦ To prepare draft plan of execution on yearly basis and monthly basis and get the same reviewed and approved by the Authority. ♦ To create awareness amongst peopl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this is substantiated on perusal of the clause relating to consideration which is based on the handling of waste collected, segregated, transported and disposed off on tonnage basis and not on the headcount basis. The applicant has stated that the Services provided by them under the Service agreements with the concessionaries are appropriately classifiable under SAC/Heading 9994 - Waste Collection, treatment and disposable services of the Annexure to Notification 11/2017-CT(R) dated 28.06.2017. They have further stated that the services are covered under entry 32(ii) of Notification No. 11/2017-C.T.(Rate) dated 28th June 2017 and liable to GST @ 18%(CGST9% +TNGST 9%) unless exempted otherwise . 2.7 On their understanding about the exemption from payment of GST for services supplied under the Service Agreements with Concessionaries, they have stated that they are not going to procure, create and construct the Project Facilities and assets; Various consumables such as brooms, bins, uniforms, masks, hand gloves, disinfectants and cleaning chemicals/soap etc to be used while carrying out the work of waste collection and disposal will not be procured by them but made available to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e No. 11/2018, IN RE: ANKIT TANDON AND ENTERPRISES 85 TOLLWAYS PVT LTD [2018 (17) G.S.T.L.499 (A.A.R.-GST)] = 2018 (9) TMI 1039 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH * KAR ADRG 93/2019, dated 27.09.2019, IN RE: QUATRO RAIL TECH SOLUTIONS LIMITED [2019 (31) G. S.T. L. (A.A.R. -GST)] = 2019 (10) TMI 1134 - AUTHORITY FOR ADVANCE RULING, KARNATAKA * AAR Uttarakhand in Ruling No.10/2018-19, dated 22.10.2018 in Application No. 11/2018-19, IN RE: NHPC LIMITED [2018 (19) G.S.T.L. 349 (A.A. R. -GST)] = 2018 (11) TMI 1265 - AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND 2.8 The applicant has referred to the following recommendation of GST Council in its 25th Meeting held on 18.01.2018: "To reduce GST rate (from 18% to 12%) on the Works Contract Services (WCS) provided by sub-contractor to the main contractor providing WCS to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity, which attract GST of 12%. Likewise, WCS attracting 5% GST, their sub-contractor would also be liable @ 5%". They have stated that similar issue also came up before Advance Ruling Authority of Uttarkhand in the case of NHPC and the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T.L. 45 (A.A.R. -GST)] = 2019 (6) TMI 1339 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL * AAR, West Bengal in the case of Indrajit Singh [2019 (25) G.S.T.L. 590 (A.A.R.-GST)] = 2019 (6) TMI 486 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL * AAR Rajasthan in the case of Municipal Corporation Pratapgarh [2019 (24) G.S.T.L. 301 (A.A.R-GST)] = 2019 (4) TMI 1400 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN * AAR Tamilnadu in the case of Tamilnadu Water Investment Company Limited [2019 (21) G.S.T.L 342 (A.A.R-GST)] = 2019 (2) TMI 187 - AUTHORITY FOR ADVANCE RULING, TAMILNADU 2.11 They have also stated that Sovereign functions of local authority are also exempt under GST, in their instant case though the entry in Sl.No.3 of Notification 12/2017 CT(R) is relevant, entries in Sl.No 3A to 9 of the notification clearly specifies that various activities and services performed by Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity which are in nature of Sovereign functions entrusted by constitution of India Are exempt from GST. They have stated that during Pre-GST regime, the CBEC has also clarified that the activities ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (122) E.L.T. 327 (S.C.)] = 2000 (11) TMI 140 - SUPREME COURT The applicant has stated that where such services are sub-contracted on back to back basis, the purpose of the exemption would be truly followed and implemented only by way of allowing the said exemption to all service providers in a chain, whether main contractor or sub-contractor. In view of the above, they have stated that supply of pure services whether by the Concessionaires (i.e. Main contractor) or by them(sub-Contractor) are ultimately provided to the Authority and the same are exempted from GST in terms of entry No. 3 of the Notification No. 12/2017-C.T.(Rate) dated 28th June 2017. 3.1 Due to the prevailing PANDEMIC situation and in order not to delay the proceedings, the appellant was addressed through the Email Address mentioned in the application to seek their willingness to participate in a virtual Personal Hearing in Digital media vide e-mail datea 03.07.2020. The applicant consented and the hearing for admission of the application was held on 06.08.2020. The authorised representative participated in the hearing. He reiterated the submissions made along with their application which is in detail. As all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction and support in transportation of solid waste. The applicant has sought ruling on the following questions: 1. What is the classification for supply of services by the applicant relating to waste collection, segregation, treatment, transportation and disposal services under the service agreements entered with both concessionaries in terms of notification 11/2017? 2. Whether the activity waste collection, segregation, treatment, transportation and disposal services under the service agreements entered with both concessionaries is exempted from Goods and Services Tax in terms of entry no.3 of the Notification 12/2017-Central Tax (rate) dated 28.06.2017? 7. From the submissions before us, we find that the question raised before us are the classification of the supply of service by the applicant and applicability of entry No.3 of Notification no. 12/2017-C.T.(Rate) to the said supply by them. The Questions raised are covered under Section 97(2)(a) 86 (b) of the CGST/TNGST Act 2017 and therefore admissible before this authority for consideration and pronouncement of ruling. 8.1 The facts of the case is that the applicant has entered into Service Agreements with the Concessiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lection services of hazardous waste 635 999422 Collection services of non-hazardous recyclable materials 636 999423 General waste collection services, residential 637 999424 General waste collection services, other nowhere else classified 638 Group 99943 Waste treatment and disposal services 639 999431 Waste preparation, consolidation and storage services 640 999432 Hazardous waste treatment and disposal services 641 999433 Non-hazardous waste treatment and disposal services 642 Group 99944 Remediation services 643 999441 Site remediation and clean-up services 644 999442 Containment, control and monitoring services and other site remediation services 645 999443 Building remediation services 646 999449 Other remediation services nowhere else classified 647 Group 99945 Sanitation and similar services 648 999451 Sweeping and snow removal services 649 999459 Other sanitation services nowhere else classified 650 Group 99949 &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aste x. transfer facility services for non-hazardous waste xi. consolidation and preparation of non-hazardous waste for transportation to an appropriate facility that processes waste 999451 Sweeping and snow removal services This service code includes: i. street sweeping and cleaning services ii. gritting and salting of roads iii. snow ploughing and removal iv. runway sweeping and snow removal services v. runway vacuuming services From the above, it is evident that * General collection of waste, garbage, refuse, etc from the residential and non-residential locations on a regular or flexible schedule is covered under 999423/999424 * Consolidation, transportation of various waste are covered under 999431; * Street Sweeping and cleaning service is covered under 999451 Accordingly, we hold that the services supplied by the applicant are classifiable under SAC 9994 of Annexure to Notification No. 11/2007-C.T.(Rate) dated 28.06.2017. 9.1 On the applicability of the exemption at SI.No. 3 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017, the contention of the applicant are: * Services supplied by them are covered as 'Pure Services' * GCC is covered as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Para 8 above, it is held by us that the supply of the applicant is covered under SAC 9994 and the applicant makes 'Supply of Pure Services' 9.4 The Service Agreement is entered into by the Applicant with the Concessionaires who are registered Companies and do not belong to the class of Service receivers to whom, when such services are provided, the exemption under the said entry applies. It is the contention of the applicant that GCC is a Local Authority and services provided by them in the capacity of the sub-contractor are covered as 'Services provided to GCC'. Greater Chennai Corporation is a Local Authority and the same needs no discussions or findings. However, as per the service agreement the services provided are only pertaining to Greater Chennai Corporation and not provided to GCC but the applicant is providing the service only to the concessionaries who are the recipient of the services. 9.5 The Applicant claims that they have been appointed as back to back service provider and in such a position, the services of sub-contractor are to be treated as provided to the ultimate client and not to the main contractor and the GST rate applicable to the main/principal contracto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/2017- C.T.(Rate) dated 28.06.2017 Entry at 3(v) referred do not specify the class of service provider to whom it applies. The entry is specific to the composite supply of works contract pertaining to railways including monorail and metro. This has no relevance to the case at hand 3. 2018 (17) G.S.T.L. 499 (A.A.R -GST-Madhya Pradesh) In RE: Ankit Tandon and Enterprises & Tollways Pvt Ltd. Order No. 9/2018 dt. 09.08.2018 = 2018 (9) TMI 1039 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH Assessee in the capacity of Sub-contractor claimed exemption under SI. No. 23 of Notification No. 12/2017- C.T.(Rate) dated 28.06.2017 Entry at 23(v) referred do not specify the class of service provider to whom it applies. The entry is specific to the Service by way of access to a road or a bridge on payment of toll charges. This has no relevance to the case at hand 4. 2019 (31) G.S.T.L. 620 (A.A.R-GST) In RE: Quatro Rail Tech Solutions Limited. Advance Ruling No. KAR ADRG 93/2019 dated 27.09.2019 = 2019 (10) TMI 1134 - AUTHORITY FOR ADVANCE RULING, KARNATAKA Assessee in the capacity of sub-contractor has undertaken works of works-contract for the works pertaining to Railways-covered under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts also. In as much as the recipient of the service of the applicant do not fall in the specified class of recipients, we do not find merit in this claim of the applicant. 9.7 The applicant has stated that 'Activities of Waste Management Services are already held as exempted' under entry Sl.No.3 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 as amended. In this connection they have relied on Ruling of various Advance Ruling Authority. As already stated, the Advance Ruling is applicable only to the applicant and the Jurisdictional Authority of the said applicant and cannot be applied to all cases. However, on perusal of the relied upon rulings, it is seen that the facts of the cases dealt with is the supply made directly to the Municipal corporations/Government entities and the facts are not the same and in that count also cannot be applied to the present facts. 9.8 The applicant relying on the provisions existed in the Pre-GST Regime and drawing attention to entries under Sl.No. 3 to 9 of the Notification No. 12/2017-C.T.(RATE) in the GST regime, has stated that the intention of the law makers is to exempt various activities and services performed by the Central/State Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption notifications are to be interpreted strictly as to their eligibility. One cannot be influenced by extraneous factors while determining a person's eligibility to an exemption notification. Therefore, on a strict interpretation of the entry Sl.No. 3 and 3A, we hold that the supply of services by the sub-contractors to the Appellant is not eligible for the benefit of exemption under either Sl.No. 3 or 3A of Notification No. 12/2017 CT(r) dated 28.06.2017." 9.11. To summarize, the words of the entry at S.No.3 of the Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 are very clear in that the class of service providers is clearly mentioned. If the intention of the legislature is to exempt 'Pure Services by way of any activity entrusted to Panchayat/ Municipality under the Article 243 G /243 W of the Constitution', then the class of recipients will not be mentioned in the description as is available in certain entries of the said Notification(entry No. 23/3 (v), for example). Again if the intention of the legislature is to tax/exempt a supply when made by a Sub-Contractor, such intention is explicitly stated as available in entry 3(ix) of Notification No. 11/2017-C.T.(Rate) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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