TMI Blog2021 (9) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... api, 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 aforesaid Rules provide anything regarding Government s participation by way of equity in the Notified Area Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 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 any activity in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 that the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith required tools, equipments etc. However, neither the collection vehicles nor the tools and equipments are being supplied by the appellant to the NAA, Vapi. Instead, the appellant itself (through its workers) is required to use the collection vehicle for collection of garbage from point to point and dispose it off at 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 equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g local authority , the NAA, Vapi falls. As defind in clause (d) of Article 243 of the Constitution of India, Panchayat means an institution (by whatever name called) of self-government constituted under Article 243B, for the rural areas. Admittedly, the NAA, Vapi is not a Panchayat , therefore, it does not fall under sub-clause (a) of clause (69) of section 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, Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing municipal services to an industrial township is same as Municipality as defined in Article 243P(e). We have already noticed that Article 243P(e) defines Municipality as an institution of self-government constituted under Article 243Q, the word constituted used under Article 243P(e) read with Article 243Q clearly refers to the constitution in every State a Nagar Panchayat, 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. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of NHPC Limited [2018 (19) GSTL 349 (AAR-GST)]. 13.4 The appellant has not submitted any evidence in support of the aforesaid contention that the NAA, Vapi has been set up by an Act of Parliament or State Legislature. 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. 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... devolution of powers and responsibilities upon Municipalities with respect to (i) the preparation of plans for economic development and social justice; (ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule. Further, the Twelfth Schedule of the Constitution of India, inter-alia contains the following Twelfth Schedule (Article 243W) 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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