Remediation and waste-disposal services classified under SAC 9994 were held exempt as pure services for municipal waste management.

Remediation and legacy waste-disposal work involving excavation, screening, segregation and scientific disposal was classified under SAC 9994, covering remediation services and waste treatment and disposal services, and was held liable to GST at 18% on classification. The same supply was also treated as pure services because it involved only manpower and labour, with no goods supplied. Since the recipient was a governmental authority established by State legislation and the activity related to solid waste management, a municipal function under Article 243W, the exemption for pure services supplied to a governmental authority in relation to a municipal function was held to apply under Notification No. 12/2017-Central Tax (Rate).

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Issues: (i) Classification of the applicant's remediation and waste-disposal services under GST. (ii) Whether the services are exempt as pure services supplied to a governmental authority in relation to a municipal function.

Issue (i): Classification of the applicant's remediation and waste-disposal services under GST.

Analysis: The work involved excavation, screening, segregation and scientific disposal of legacy waste, including processing into RDF, compost, grit and inert fractions. The activity was found to comprise both site remediation and waste treatment/disposal, and was placed broadly under Heading 9994 of the Scheme of Classification of Services. The relevant sub-classifications noted were Group 99944 for remediation services and Group 99943 for waste treatment and disposal services.

Conclusion: The service was held to fall under SAC 9994 and to attract GST at 18%.

Issue (ii): Whether the services are exempt as pure services supplied to a governmental authority in relation to a municipal function.

Analysis: The supply was found to be a pure service, since no goods were involved and the work was executed through manpower and labour. The recipient corporation was held to be a governmental authority because it was established by a State Legislature. The activity was also linked to solid waste management, which is a municipal function under Article 243W of the Constitution of India. On that basis, the conditions of the exemption entry for pure services provided to a governmental authority in relation to a municipal function were satisfied.

Conclusion: The services were held to be exempt under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Final Conclusion: The ruling determined the classification of the supply and also extended exemption for the same services when rendered to the specified recipient in relation to the municipal function of solid waste management.

Ratio Decidendi: A remediation and waste-management supply involving only services, when provided to a body established by State legislation for carrying out solid-waste functions under Article 243W, qualifies as pure services in relation to a municipal function and is exempt under the relevant exemption entry.

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