Waste Management Services Not GST-Exempt for Concessionaires

The services provided by the applicant relating to waste collection, segregation, treatment, transportation, and disposal are classified under SAC 9994. The exemption from Goods and Services Tax under entry no. 3 of Notification 12/2017-Central Tax (Rate) does not apply as the services are provided to concessionaires and not directly to the local authority.

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Issues Involved:
1. Classification of services related to waste collection, segregation, treatment, transportation, and disposal.
2. Applicability of GST exemption for these services under entry no. 3 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017.

Issue-wise Detailed Analysis:

1. Classification of Services:
The applicant, engaged in waste management services, entered into Service Agreements with concessionaires for waste collection, segregation, treatment, transportation, and disposal in specific zones of Greater Chennai Corporation. The applicant sought to classify these services under SAC 9994 as per Notification 11/2017-C.T.(Rate) dated 28.06.2017.

The services provided by the applicant include daily door-to-door waste collection, segregation, support in transportation, collection from various sources, and street sweeping. These activities fall under:
- SAC 999423/999424 for general waste collection services.
- SAC 999431 for waste preparation, consolidation, and storage services.
- SAC 999451 for sweeping and snow removal services.

The Authority confirmed that the services supplied by the applicant are classifiable under SAC 9994 of the Annexure to Notification No. 11/2017-C.T.(Rate) dated 28.06.2017.

2. Applicability of GST Exemption:
The applicant claimed that their services should be exempt from GST under entry no. 3 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017, which exempts "Pure services provided to the Central Government, State Government, Union territory, or local authority by way of any activity in relation to any function entrusted to a Municipality under article 243W of the Constitution."

The applicant argued that:
- The services provided are "Pure Services."
- Greater Chennai Corporation (GCC) is a local authority.
- The services are related to functions entrusted to a Municipality under Article 243W.
- The exemption should apply to services provided to the concessionaires as they are ultimately for GCC.

However, the Authority noted that:
- The Service Agreements were with concessionaires, not directly with GCC.
- The concessionaires are registered companies and do not belong to the specified class of service recipients (Central Government, State Government, Union territory, or local authority).
- The services provided by the applicant are not directly to the local authority but to the concessionaires.

The Authority concluded that the exemption under entry no. 3 of Notification 12/2017-C.T.(Rate) dated 28.06.2017 does not apply to the applicant's services as the recipient of the services is not GCC but the concessionaires.

Ruling:
1. The supply of services by the applicant relating to waste collection, segregation, treatment, transportation, and disposal services under the Service Agreements entered with both concessionaires are classified under SAC 9994 in terms of Notification No. 11/2017 C.T.-(Rate) dated 28.06.2017.
2. The activity undertaken by the applicant under the Service Agreements entered with both concessionaires is not exempted from Goods and Services Tax in terms of entry no. 3 of the Notification 12/2017-Central Tax (Rate) dated 28.06.2017.

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