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of <h1>GST exemption granted for bio-medical waste collection services under Entry 3 of Notification 12/2017 as constitutional sanitation function</h1> <h3>In Re: M/s. SNG Envirosolutions Pvt. Ltd.</h3> AAR West Bengal ruled on GST exemption for bio-medical waste collection and disposal services. The applicant contracted with State Government for waste ... Exemption from GST - pure services or not - Appointment of Medicare as a sub-contractor with the work of collection and disposal of bio-medical waste for the zones concerned - Applicability of entry Sl. No. 3 of Notification No. 12/2017 Central Tax dated 28/06/2017 and Sl. No 3 of Notification No. 12/2017 State Tax (Rate) dated 28/06/2017 to contractor and sub-contractor of the applicant or not - Entry Number 75 of Notification No. 12/2017 Central Tax (Rate) dated 28/06/2017 and Entry No 75 of Notification No. 12/2017 State Tax (Rate) dated 28/06/2017 are applicable to the sub-contractor of the applicant or not. Whether the provisions of Entry Number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 and Entry No 3 of Notification No. 12/2017 State Tax (Rate) dated 28/06/2017 are applicable to the applicant or not? - HELD THAT:- In the instant case, the applicant has entered into the agreement with State Government for the collection and disposal of bio- medical waste from various clinical establishments and for which, State Government is liable to pay the consideration to the applicant. So, there can be no dispute that the applicant is supplying the services to State Government. In fact, the applicant himself has admitted the same - since Medicare raises invoices on the applicant for the work done by it as a sub- contractor and the applicant is liable to pay the consideration to Medicare, admittedly it is a supply by the sub-contractor to main contractor i.e., supply of services by Medicare to the applicant. The functions entrusted to a Panchayat as listed in the Eleventh Schedule include the functions like ‘Health and sanitation, including hospitals, primary health centres and dispensaries’. Further, the functions entrusted to a municipality as listed in the Twelfth Schedule includes ‘Public health, sanitation conservancy and solid waste management’. According to Cambridge Dictionary, ‘sanitation’ means “the systems for taking dirty water and other waste products away from buildings in order to protect people’s health”. Further, ‘sanitation and similar services’ (Group: 99945) falls under Heading 9994: Sewage and waste collection, treatment and disposal and other environmental protection services. Furthermore, Government of West Bengal floated the Request for proposal (RfP) for selection of Common Bio Medical Waste Treatment Facility (‘CBMWTF’) Operators for Public Health Facilities in West Bengal. The services provided by the applicant for the collection and disposal of bio- medical waste from various clinical establishments is found to be a matter as listed in the Eleventh and/or Twelfth Schedule in relation to functions entrusted to a Panchayat under article 243G and/or to a municipality under article 243W of the Constitution of India. Whether the provisions of Entry Number 3 of Notification No. 12/2017 Central Tax(Rate) dated 28/06/2017 and Entry No 3 of Notification No. 12/2017 State Tax (Rate) dated 28/06/2017 are applicable to the sub-contractor of the applicant or not? - Whether the provisions of Entry Number 75 of Notification No. 12/2017 Central Tax (Rate) dated 28/06/2017 and Entry No 75 of Notification No. 12/2017 State Tax (Rate) dated 28/06/2017 are applicable to the sub-contractor of the applicant or not? - HELD THAT:- No ruling can be given these questions since the applicant is recipient of services in respect of supplies involved in the these questions. Issues Involved:1. Applicability of Entry Number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 to the applicant.2. Applicability of Entry Number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 to the sub-contractor of the applicant.3. Applicability of Entry Number 75 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 to the sub-contractor of the applicant.Issue-Wise Analysis:1. Applicability of Entry Number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 to the Applicant:The applicant entered into an agreement with the Department of Health Services, Government of West Bengal for the collection and disposal of bio-medical waste from various clinical establishments. The applicant contends that these services do not involve any supply of goods and are provided to the State Government, thus qualifying for exemption under Entry Number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017.The conditions for exemption under Entry Number 3 are:- The service must be a pure service (excluding works contract service or other composite supplies involving supply of any goods).- The service recipient must be the Central Government, State Government, Union territory, local authority, Governmental authority, or Government Entity.- The service must be in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or to a Municipality under Article 243W of the Constitution.The Authority found that the services provided by the applicant meet these conditions. Specifically, the services relate to 'Health and sanitation, including hospitals, primary health centres and dispensaries' under the Eleventh Schedule and 'Public health, sanitation conservancy and solid waste management' under the Twelfth Schedule. Therefore, the services provided by the applicant to the State Government for the collection and disposal of bio-medical waste are covered under Entry Number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017, and are exempt from GST.2. Applicability of Entry Number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 to the Sub-Contractor of the Applicant:The applicant sought a ruling on whether the services provided by its sub-contractor, Medicare, also qualify for exemption under Entry Number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017. The Authority observed that the applicant is the recipient of services from the sub-contractor and thus cannot seek an advance ruling on this matter. The GST Act allows advance rulings only on supplies undertaken or proposed to be undertaken by the applicant. Therefore, no ruling was given on this question.3. Applicability of Entry Number 75 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 to the Sub-Contractor of the Applicant:Similarly, the applicant sought a ruling on whether the services provided by its sub-contractor qualify for exemption under Entry Number 75 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017. The Authority reiterated that the applicant is the recipient of services in this context and cannot seek an advance ruling. Therefore, no ruling was given on this question.Ruling:1. The services provided by the applicant to the State Government for the collection and disposal of bio-medical waste from various clinical establishments are covered under Entry Number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 and are exempt from GST.2. No ruling can be given on the applicability of Entry Number 3 and Entry Number 75 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 to the sub-contractor of the applicant, as the applicant is the recipient of services in these cases.
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