TaxTMI 
TaxTMI 
TaxTMI 
2021 (9) TMI 1291
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.... The appellant cited the judgement of the Income Tax Appellate Tribunal, Ahmedabad in the case of the Income Tax Officer, Surat Vs. Sachin Notified Area, [ITA No. 1315/Ahd/2007] and the judgement of the Hon'ble Supreme Court of India in case of Saij Gram Panchayat Vs. State of Gujarat & others., (1992) 2 SCC 366 wherein it was held that a notified area, so created, would be governed by all the provision of the Gujarat Municipalities Act, 1963, applicable to notified areas under that act. 2. An agreement was entered into between the appellant and the Notified Area Authority, Vapi (herein after referred to as the 'NAA, Vapi') on 04.02.2019, where under the appellant is required to provide services for collection, sorting, recovery of solid waste and establish / set up Material Recovery Facility for sustainable waste management in Vapi Notified Area on DBFOOM (Design, Build, Finance, Own, Operate & Maintain) model for five years, for an amount of Rs. 1,71,10,000/-. 3. The appellant raised the following question for advance ruling before the GAAR:- (i) Whether the solid waste management service provided by the applicant to Notified Area Authority, Vapi under the above referred agre....
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..../2017-Central Tax (Rate) dated 28.06.2017. 5. Aggrieved by the aforesaid ruling, the appellant has filed the present appeal. 6.1 The appellant has submitted that an agreement was entered into between the appellant and NAA, Vapi on 04.02.2019. Under the said agreement the appellant has to provide services for collection, sorting, recovery of solid waste and establish / set up Material Recovery Facility for sustainable waste management in Vapi Notified Area on DBFOOM (Design, Build, Finance, Own, Operate & Maintain) model for five years. In entire process the appellant provides only services to NAA, Vapi and there is no supply of goods whatsoever during providing such solid waste management and recycling service to NAA, Vapi. 6.2 It has been submitted by the appellant that the waste management services include door to door collection of garbage / waste; that sorting and recovery of waste is pure service as there is no supply of goods involved in this activity. Setting up of material recovery facility and Food Compost Facility operation and maintenance does not involve any transfer in goods and these are not the activities for which consideration is given by the NAA, Vapi to the ap....
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....to in their submission, is covered under Sr. No. 3 of Notification No. 12/2017- Central Tax (Rate) and Notification No. 12/2017-State Tax (Rate) (the Central Tax (Rate) Notification referred to includes the reference to corresponding State Tax (Rate) Notification also] and thereby exempted from payment of Goods and Services Tax or otherwise. 9. The appellant has submitted that it has provided 'pure service' to 'local authority' i.e. NAA, Vapi in relation to function entrusted to Municipality under Article 243W of the Constitution. The appellant has submitted that the GAAR has not disputed other submissions made by the appellant for claiming exemption under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate). However, we observe that the GAAR has only examined whether the activity of the appellant is 'pure service' or otherwise and on that basis itself, it has been held that the services provided by the appellant are not exempted under Notification No. 12/2017-Central Tax (Rate). The GAAR has not found it necessary to examine other aspects relevant for deciding admissibility of exemption under Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) and it has been specificall....
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....disposed off at MSW site & cleaning of dustbins in area every day. This work is inclusive of supply of workers & Collection Vehicles (over all notified area inclusive all Industrial Zone) per day, with all tools & plants like brooms, masks, Aprons, hand gloves, gumboots, rain coats in monsoon period etc. to all workers. ..........." It appears from the aforesaid stipulation that the appellant is required to collect garbage from point to point, dispose it off at MSW site and clean dustbins in area every day. In order to carry out this work, the appellant is required to provide workers and collection vehicles with required tools, equipments etc. However, neither the collection vehicles nor the tools and equipments are being supplied by the appellant to the NAA, Vapi. Instead, the appellant itself (through its workers) is required to use the collection vehicle for collection of garbage from point to point and dispose it off at specified place. The appellant is also required to deploy workers for this work to whom necessary tools and equipments are required to be provided. Thus, it cannot be said that the appellant is supplying goods to the NAA, Vapi. In fact, the appellant is requi....
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....l Government or any State Government with the control or management of a municipal or local fund; (d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006 (41 of 2006); (e) a Regional Council or a District Council constituted under the Sixth Schedule to the Constitution; (f) a Development Board constituted under article 371 [and article 371J] of the Constitution; or (g) a Regional Council constituted under article 371A of the Constitution;" 12.4 The appellant has not specified under which of the sub-clauses of section 2(69) of the GST Acts defining "local authority", the NAA, Vapi falls. As defind in clause (d) of Article 243 of the Constitution of India, "Panchayat" means an institution (by whatever name called) of self-government constituted under Article 243B, for the rural areas. Admittedly, the NAA, Vapi is not a "Panchayat", therefore, it does not fall under sub-clause (a) of clause (69) of section 2 of the GST Acts. 12.5.1 Further, the NAA, Vapi is neither a Municipality, nor a Municipal Committee, nor a Zilla Parishad, nor a District Board. The appellant has also not submitted any evidence so that the NAA, Vapi can be termed as 'any other author....
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.... and the municipal services either being provided or proposed to be provided by an industrial establishment specify it to be an industrial township. The words industrial township have been used in contradiction of a Nagar Panchayat, a Municipal Council and a Municipal Corporation. The object of issuance of notification is to relieve the mandatory requirement of constitution of a Municipality in a State in the circumstances as mentioned in proviso but exemption from constituting Municipality does not lead to mean that the industrial establishment which is providing municipal services to an industrial township is same as Municipality as defined in Article 243P(e). We have already noticed that Article 243P(e) defines Municipality as an institution of self-government constituted under Article 243Q, the word constituted used under Article 243P(e) read with Article 243Q clearly refers to the constitution in every State a Nagar Panchayat, a Municipal Council or a Municipal Corporation. Further, the words in proviso a Municipality under this clause may not be constituted clearly means that the words may not be constituted used in proviso are clearly in contradistinction with the word const....
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....d to a Municipality under article 243W of the Constitution or to a Panchayat under article 243G of the Constitution." 13.3 The appellant has submitted that the NAA, Vapi should be considered as "Governmental Authority" under sub - clause (i) of definition provided at clause (zf) of Paragraph 2 of the Notification. The appellant has also submitted that the condition of 90% or more participation by way of equity or control shall be applicable only to sub-clause (ii) of the said definition and has relied upon the ruling given in the case of NHPC Limited [2018 (19) GSTL 349 (AAR-GST)]. 13.4 The appellant has not submitted any evidence in support of the aforesaid contention that the NAA, Vapi has been set up by an Act of Parliament or State Legislature. It appears from the copy of the agreement submitted by the appellant that the NAA, Vapi has been formed under the Government of Gujarat, Industries, Mines and Power Department's Notification No. GHU/72/66/IND/ 1672/2471-G dated 06.07.1972 read with Notification No. GHU:8/2008-GID:102004:1496:G dated 01.04.2008. Apparently, the NAA, Vapi has not been set up by an Act of Parliament or State Legislature. Obviously, an authority or entity ....