2019 (2) TMI 64 - AAR - GST

Services to Chhattisgarh Housing Board exempt from GST under Notification No. 12/2017

In Re: Shri Dhananjay Kumar Singh

The ruling determined that the services provided by the applicant to the Chhattisgarh Housing Board are exempt from GST under Notification No. 12/2017 as ... Rate of GST - Exempted supply or not - supply of services to Solid waste management, Garbage Collection, Disposal, Water Supply, Cleaning of Colony - Pure Services - N/N. 12/2017 dated 28th June, 2017 - Governmental Board - Authority issuing work order to the applicant i.e. Chhattisgarh Housing Board - public utility services - Held that:- Chhattisgarh Housing Board is a “Government Authority” as per No. 12/2017-State Tax (Rate) No. F-10- 43/2017/CT/V(80), Naya Raipur, Dated 28.06.2017 and as amended by Notification No. 31/2017-State Tax (Rate) No. F-10-82/2017/CT/V(146), Naya Raipur, Dated 13.10.2017 - Chhattisgarh Housing Board is a Government Authority fully owned by the State Government. Whether the nature of service supplies being provided by the applicant falls under 12th schedule, Article 243W of the Indian Constitution? - Held that:- The service supply to be provided by the applicant by their very nature appear to fall in the list of services enumerated under serial no. 5, 6, 8, 10, 12 and 17 of 12th schedule of Article 243W of the Indian Constitution, thus qualifying the admissibility criterion. It has also been categorically stated by the applicant that the said services to be provided to Chhattisgarh Housing Board does not involve any transfer/sale of any goods - the said services provided by the applicant to Chhattisgarh Housing Board qualifies being placed under the category of services as stipulated under Notification No. 12/2017-State Tax (Rate) No. F-10-43/2017/CT/V(80), Naya Raipur, Dated 28.06.2017 and hence is exempt. Issues Involved:1. Classification of services provided by the applicant.2. Applicability of GST exemption under Notification No. 12/2017.3. Determination of the status of Chhattisgarh Housing Board as a Governmental Authority.4. Examination of whether the services fall under public utility services as per Article 243W of the Indian Constitution.Detailed Analysis:1. Classification of Services Provided by the Applicant:The applicant, engaged in service contracts, was awarded a contract by the Chhattisgarh Housing Board (CGHB) for services related to solid waste management, water supply operations, garbage collection and disposal, colony cleaning, drainage system maintenance, sewerage cleaning, and cleaning of common areas in residential areas developed by CGHB. These services are typically provided by local authorities to residents.2. Applicability of GST Exemption under Notification No. 12/2017:The applicant sought an advance ruling on whether these services are exempt under Notification No. 12/2017 dated 28th June 2017, which exempts 'pure services' provided to the government or local authorities in relation to functions entrusted under Article 243W of the Constitution. The ruling confirmed that the services provided by the applicant fall under this exemption as they are considered 'pure services' without any supply of goods involved.3. Determination of the Status of Chhattisgarh Housing Board as a Governmental Authority:The Chhattisgarh Housing Board (CGHB) is a public sector undertaking constituted under the Chhattisgarh Housing Board Act, 1972. It performs functions similar to those of a municipality, such as slum improvement and solid waste management, until the developed areas are handed over to local authorities. The ruling referenced the definition of 'Governmental Authority' under Notification No. 25/2012 and concluded that CGHB qualifies as a Governmental Authority due to its establishment by a State Act and its functions entrusted by the State Government.4. Examination of Whether the Services Fall Under Public Utility Services as per Article 243W of the Indian Constitution:The ruling examined the nature of the services provided by the applicant, which include solid waste management, water supply, garbage collection, and colony cleaning. These services are listed under the Twelfth Schedule of Article 243W of the Indian Constitution, which enumerates functions entrusted to municipalities. The ruling concluded that the services provided by the applicant fall under the public utility services listed in Article 243W, thereby qualifying for the exemption under Notification No. 12/2017.Conclusion:The ruling determined that the services provided by the applicant to the Chhattisgarh Housing Board are exempt from GST under Notification No. 12/2017, as they are pure services related to functions entrusted to municipalities under Article 243W of the Constitution. The exemption is applicable as long as no transfer of property in goods is involved and the services are provided to the State Government, Central Government, local authority, or a Governmental Authority.Order:1. The supply of services for colony maintenance work to CGHB, including solid waste management, water supply, garbage collection and disposal, and cleaning of various areas, is treated as exempt under Notification No. 12/2017, Serial No. 3, Chapter 99.2. The exemption is not applicable if there is any transfer of property in goods involved or if the services are provided to entities other than the State Government, Central Government, local authority, or Governmental Authority.