Bio-mining and scientific closure services for legacy waste qualify for GST exemption under Notification 12/2017

AAR Kerala ruled that bio-mining and scientific closure services for legacy waste at Kureepuzha dumpsite qualify for GST exemption under Notification No. 12/2017. The services were classified under SAC 9994 as waste treatment and disposal services. The authority held that all three conditions for exemption were satisfied: services were pure services without goods incorporation, provided to local authority (Kollam Municipal Corporation), and related to solid waste management functions under Article 243W of the Constitution. The applicant's waste containment, treatment, and land reclamation activities were deemed exempt from GST.

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Issues Involved:
1. Classification of the services "Bio-Mining and Scientific Closure of Legacy wastes at the dumpsite in Kureepuzha, Kollam."
2. Whether the aforesaid services provided by the Applicant are exempted under SI.No.3 of Notification No. 12/2017 dated 28.06.2017 as amended.

Issue-wise Detailed Analysis:

1. Classification of Services:
The applicant, a municipal solid waste management company, sought to classify the services "Bio-Mining and Scientific Closure of Legacy wastes at the dumpsite in Kureepuzha, Kollam." The applicant contended that these services fall under SAC Code No. 9994, specifically Group 99943 "Waste treatment and disposal services" as per Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. The authority examined the provisions and confirmed that the activities undertaken by the applicant, which include containment, temporary storage, treatment, and disposal of waste, ultimately aiming at land reclamation, merit classification under SAC 9994 - "Sewage and waste collection, treatment and disposal and other environmental protection services" - Group 99943 "Waste treatment and disposal services."

2. Exemption under Notification No. 12/2017:
The applicant claimed that the services provided are exempt under SI.No.3 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended. This entry exempts pure services provided to the Central Government, State Government, Union territory, or local authority by way of any activity related to functions entrusted to a Panchayat under Article 243G or a Municipality under Article 243W of the Constitution. The authority examined the conditions for exemption:
- The services must be pure services, excluding works contract service or other composite supplies involving the supply of any goods.
- The services must be provided to the Central Government, State Government, Union Territory, or local authority.
- The services must be related to any function entrusted to a Panchayat under Article 243G or a Municipality under Article 243W of the Constitution.

The authority confirmed that the services rendered by the applicant are devoid of any incorporation of goods, thus qualifying as pure services. The Kollam Municipal Corporation was recognized as a local authority under Section 2(69) of the CGST Act, 2017. The services provided, which include Biomining and Scientific closure of existing waste, fall under public health, sanitation conservancy, and solid waste management, as specified in SI.No. 6 of the Twelfth Schedule to Article 243W of the Constitution. Therefore, all conditions for exemption were satisfied.

Ruling:
1. The services "Bio-mining and scientific closure of legacy wastes at the dumpsite in Kureepuzha, Kollam" are classifiable under SAC 9994 as per the Annexure to Notification No. 11/2017-C.T. (Rate) dated 28.06.2017.
2. The aforesaid services provided by the applicant are exempted under SI. No. 3 of the Notification No. 12/2017-C.T. (Rate) dated 28.06.2017 as amended.

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