Solid waste management services not exempt from GST for appellant serving Notified Area Authority, Vapi.

The appellate authority upheld the ruling that the solid waste management services provided by the appellant to the Notified Area Authority, Vapi were not exempt from GST under Notification No. 12/2017-Central Tax (Rate). This decision was based on the finding that the Notified Area Authority, Vapi did not qualify as a "local authority" or "Governmental Authority" as required for the exemption. Consequently, the appeal was dismissed, affirming that the appellant's services were subject to GST.

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Issues Involved:
1. Whether the solid waste management service provided by the appellant to the Notified Area Authority, Vapi (NAA, Vapi) is exempted under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
2. Whether the NAA, Vapi qualifies as a "local authority" or "Governmental Authority" under the GST Acts.

Issue-wise Detailed Analysis:

1. Exemption under Notification No. 12/2017-Central Tax (Rate):
- The appellant contended that the services provided to NAA, Vapi fall under "Pure Services" as defined in Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate), which exempts services provided to governmental bodies in relation to functions entrusted to a Panchayat or Municipality under Articles 243G and 243W of the Constitution.
- The GAAR observed that the services provided by the appellant included the cost of collection vehicles, tools, and other equipment, which implied the supply of goods along with services. Hence, it was not considered "Pure Services."
- The appellant argued that these costs were operational expenses and did not constitute the supply of goods to NAA, Vapi.
- The appellate authority examined the agreement and concluded that the use of goods and equipment by the appellant in providing the service did not change the nature of the service from "pure service" to "service with goods."

2. Qualification of NAA, Vapi as a "local authority" or "Governmental Authority":
- The appellant claimed that NAA, Vapi is a local authority providing municipal services similar to a municipality under Article 243W of the Constitution.
- The definition of "local authority" under Section 2(69) of the GST Acts was scrutinized. It includes entities like Panchayats, Municipalities, Zilla Parishads, and other authorities legally entitled to manage municipal funds.
- The appellate authority found that NAA, Vapi did not fall under any of these categories as it was not constituted as a Municipality or any other specified local authority.
- The appellant also argued that NAA, Vapi should be considered a "Governmental Authority" under clause (zf) of Paragraph 2 of Notification No. 12/2017-Central Tax (Rate), which requires the authority to be set up by an Act of Parliament or State Legislature with 90% or more government control.
- The appellate authority noted that NAA, Vapi was established by a government notification and not by an Act of Parliament or State Legislature, and did not meet the criteria for government control as defined.

Conclusion:
- The appellate authority held that the services provided by the appellant to NAA, Vapi did not qualify for exemption under Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate) because NAA, Vapi was neither a "local authority" nor a "Governmental Authority."
- The appeal was dismissed, and the ruling of the GAAR was upheld, concluding that the solid waste management services provided by the appellant to NAA, Vapi were not exempt from GST.

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