TMI Blog2022 (8) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Heading SAC 99942. The activity undertaken by the applicant is waste treatment/processing of wet waste provided by GCC and maintenance of the designated Micro compost centers of GCC, by employing their own personnel. The activity while covered under the Heading 9994, will more appropriately fall under the Group 99943- waste treatment and disposal services rather than group 99942-Waste collection Services - the classification of the activity of Maintaining Micro Compost Centers and processing the wet waste provided by GCC, is classifiable under Heading 9994 and more specifically under group 99943- 'Waste Treatment and Disposal services'. Applicability of serial No.3 of Notification No.12/2017-Central Tax (Rate)., dated 28/07/2017 - HELD 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). - TN/30/ARA/2022 - - - Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nated locations for a period of 3 years in Center Region Zones 7, 9 and 10 in Chennai City. In the Request for Proposal (RFP) for Maintaining the micro compost centres and processing the wet waste provided by GCC at designated locations in Center Region Zones 7,9 10 , on the role of the bidder it is stated that: The role of the service provider was defined to be maintenance of the micro-compost centres and processing of wet waste provided by GCC. Such waste is generated by residences, commercial firms, and industries of Chennai City A The Applicant should maintain and process the solid wet waste by employing labourers and operators. The processing of the waste should be free from odour, non-polluting, safe, emission-free and non-contaminating. The by-product of manure should be handed over to the GCC GCC would provide the support infrastructure like shed, shredding machines, sieving machines, weighing machine, storage space, etc. It will also bear service charges such as electricity bill and water charges. The storage space for harvested manure would also be provided by the GCC. The repair works of the infrastructure in the micro composting centre would be provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he request for proposal, work order and the proposal. 2.3 On interpretation of law, they had referred to Sl.No.3 of exemption Notification 12/2017 CT(R); Circular No 51/25/2018-GST, dated 31/07/2018, wherein the Central Government clarified that the service tax exemption at Serial No. 25 (a) of Notification No. 25/2012 dated 20/06/2012 has been substantially, although not in the same form, continued under the GST era. They have stated that to qualify for the exemption under Notification No 12/2017-Central Tax (Rate), three conditions have to be cumulatively satisfied: (a) The supply must be a pure service; (b) Such service must be provided to the Central Government, State Government or Union territory or local authority; (c) If provided to a local authority, such service must be 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. They have stated that they satisfy all the three pre-conditions stipulated in Notification No 12/2017-Central Tax (Rate) and are entitled to the exemption conferred thereunder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are constitutionally designated as the functions of municipalities. Most notably, Entry 6 in the Twelfth Schedule provides that Public health, sanitation conservancy and solid waste management and Entry 8 of the Twelfth Schedule provides that Urban forestry, protection of the environment and promotion of ecological aspects shall be municipal functions. Hence, the services rendered by them to GCC are in relation to a function entrusted to a Municipal Corporation under Article 243-W of the Constitution in as much as they pertain to solid waste management in the City of Chennai. 2.5 The applicant has placed reliance on the following case laws to substantiate their contentions: Zigma Global Environ Solutions Put Ltd [2020 (43) GSTL 96 (AAR-GST-TN)], New Tirupur Area Development Corporation Ltd., [2021 (51) GSTL 432 (AAR-GST-TN)], Zigma Global Enuiron Solutions Put Ltd [2020 (39) GSTL 182 (AAR-GP-AP] Time Tech Waste Solutions Put Ltd [2019 (27) GSTL 45 (AAR-GST)] Madivalappa Karveerapppa Beiwadi [2021 (55) GSTL 597 (AAR-GST-Kar)], 3.1 The applicant was addressed through the Email Address mentioned in the application to seek their wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) The compost manure is handed over to the GCC as per its direction. The applicant has stated that they only supply the labourers who do the above activities in the Corporation Micro Compost Centres. They have furnished the copies of invoices raised on GCC and the ledger account details from April 2021 to March 2022. 4. The State Jurisdictional Authority Perambur Assessment Circle has stated that the service provided by the applicant is exempted under chapter 99 pure services (excluding works contract service or other composite supplies involving supply of any goods) as it is provided to the local authority by way of any activity in relation to any function entrusted to panchayat under article 243G of the Constitution in relation to any function entrusted to a Municipality under article 243W of the Constitution. 5. The Central Jurisdictional Authority ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement 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 value of Rs. 9,09,36,027.50/- for a period of three years. 7.2 The Scope of work as per pares 6 of the said agreement is The service Agency shall perform the services specified at Section 6 of RFP, which is made an integral part of this Agreement . Para 6 of the RFP in S.W.M.C No. A7/0108A/2020 is given below for ease of reference: The service agency should maintain and process by employing labours, operators as per the table 2 ( total work force to be engaged) the wet waste design capacity of 49.14 MT/ clay at 45 locations of Center Region Zones 7,9 10. The process to be proposed by the service agency should mandatorily full-fill the following: Processing should be free from odor Eco friendly and non-polluting process in order to reduce the impact of the processing site in the adjacent areas. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollection, 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 recyclable materials 636 999423 General waste collection services, residential 637 999424 General waste collection services, other nowhere else classified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article 243W of the Constitution. Nil Nil The above entry exempts Pure Services falling under Chapter 99 Provided to Central Government/State Government/Union Territory/Local authority By way of any activity in relation to any function entrusted to a Panchayat 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 app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... management. Further, Rule 15 of the Solid Waste Management Rules 2016, vests the Local Authorities with the responsibilities to prepare and implement effective Solid Waste Management of the waste generated in the limits of said authority. On a cogent reading of Sl.No. 6 of the Twelfth Schedule to the Constitution and Rule 15 of the Solid Waste Management Rules 2016, 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 refere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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