Municipality's Waste Management Services Exempt from GST under Notification No. 12/2017

The applicant's supply of conservancy/solid waste management services to the Howrah Municipal Corporation is exempt from GST under Sl No. 3 of Notification No. 12/2017 - Central Tax (Rate). The authority found that the services provided were pure services related to functions entrusted to a Municipality under the Constitution, qualifying for the exemption. Additionally, the Tax Deducted at Source provisions were deemed inapplicable to the applicant's exempt supply, as confirmed by both the revenue officer and the authority.

---

---

Issues Involved:
1. Whether the applicant's supply of conservancy/solid waste management services to the Howrah Municipal Corporation (HMC) is exempt from GST under Sl No. 3 or 3A of Notification No. 12/2017 - Central Tax (Rate).
2. Whether the provisions regarding Tax Deducted at Source (TDS) are applicable to the applicant's exempt supply.

Detailed Analysis:

1. Exemption from GST:
Applicant's Submission:
- The applicant provides pure services to HMC, a local authority, which should be exempt under Sl No. 3 of Notification No. 12/2017 - Central Tax (Rate).
- Sl No. 3 exempts pure services provided to the government or local authority in relation to functions entrusted to a Panchayat or Municipality under Articles 243G and 243W of the Constitution.
- Sl No. 3A extends this exemption to composite supplies where the value of goods does not exceed 25% of the total value.
- The applicant argues that since the services provided are pure services, they should be exempt from GST.

Revenue's Submission:
- The concerned officer agrees that the applicant's services qualify as pure services under Sl No. 3 of the Exemption Notification.
- The officer confirms that the services are provided to a local authority and are related to functions entrusted to a Municipality under Article 243W.

Authority's Findings:
- The authority confirms that the applicant's services involve lifting and removing garbage, which qualifies as pure services since no goods are supplied.
- These services are related to public health, sanitation, and solid waste management, functions entrusted to Municipalities under Article 243W.
- Therefore, the applicant's services are exempt from GST under Sl No. 3 of Notification No. 12/2017 - Central Tax (Rate).

2. Applicability of TDS Provisions:
Applicant's Submission:
- The applicant contends that TDS provisions under Section 51 of the GST Act apply only to taxable supplies.
- Since the supply to HMC is exempt, TDS provisions should not apply.

Revenue's Submission:
- The revenue officer concurs that TDS provisions are applicable only to taxable supplies.
- As the applicant's supply is exempt, the TDS provisions under Section 51 and the related notifications do not apply.

Authority's Findings:
- The authority agrees that Section 51 mandates TDS deduction for taxable supplies.
- Since the applicant's supply to HMC is exempt, the provisions of Section 51 and the TDS Notifications are not applicable.

Ruling:
- The applicant’s supply to the Howrah Municipal Corporation for lifting and removing daily garbage is exempt from GST under Sl No. 3 of Notification No. 12/2017 - Central Tax (Rate).
- As the supply is exempt, the provisions of Section 51 regarding TDS do not apply to the applicant's case.

---