TaxTMI 
TaxTMI 
2022 (8) TMI 922
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....or Valarmathi Nagar 2nd Street Kolathur, Chennai, Tami Nadu. 600 099. (hereinafter called the Applicant) are registered under GST with GSTIN 33BYXPS6648Q2ZZ. The applicant has sought Advance Ruling on the following questions: 1. What is the classification of the service viz., "Maintaining the micro-compost centres and processing the wet waste provided by the Greater Chennai Corporation at designated locations in Center Region Zones 7, 9 & 10" in Chennai? 2. Whether the aforesaid service provided by the Applicant is entitled to exemption under Serial No 3 of Notification No 12/2017-Central Tax (Rate)., dated 28/07/2017, as amended from time to time? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs.5,000/ - each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that the Greater Chennai Corporation (hereinafter referred as GCC) had floated a tender for "Maintaining the Micro Compost Centres and Processing the Wet Waste provided by the GCC at the designated locations for a period of 3 years in Center Region Z....
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....e letter dated 23/07/2020, with the reference S.W.M.0 No A7/ 0108A/2020 comunicated that the Council had approved the award of work of "Maintaining the Micro Compost Centres and Processing the Wet Waste" provided by Greater Chennai Corporation at designated locations in Center Region Zones 7, 9 & 10" to the Applicant at the quoted processing fees of Rs. 1690/- PMT and for a total contract value of Rs. 9,09,36,027.50/-for a period of three years subject to the conditions stipulated thereunder; The relevant conditions, for the purposes of the present application, are that: • They should maintain and process the wet waste design capacity of 49.14 MT/day at 45 locations of Center Region Zones 7, 9 & 10. • They should deploy the working force as per the RFP condition and commence the processing work within 3 days from the date of take-over of the micro-composting centres. Processing should be free from odour and also assure security for the micro composting center including all assets. Eco friendly and non-polluting process in order to reduce the impact of the processing site in the adjacent areas. • The process should be free from emission, pollut....
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.... for the good order and administration of the city. The Municipal Act has been amended introducing from time to time major changes in the constitution and powers of the Corporation. The Madras Municipal Corporation Act, 1919 (as amended) provides the basic statutory authority for the administration now. Madras Municipal Corporation Act, 1919 was rechristened by The Tamil Nadu Act of 1996 as the Chennai City Municipal Corporation Act, 1919. Hence, Greater Chennai Corporation is a "municipality" as defined under Article 243-P(e) read with Article 243Q. Therefore, the second pre-condition for entitlement to the exemption under Serial No 3 of Notification 12/2017-Central Tax (Rate) is satisfies and the supply rendered to a "local authority". • Article 243W of the Constitution, provides for the powers, authority and responsibilities of municipalities. It states that, subject to the other provisions of the Constitution, the Legislature of a state may, by law, endow the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibili....
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....laimed that they satisfy all the conditions therein. The applicant was asked to furnish the following documents: i. write up on the activities undertaken referencing to the agreement entered into ii. Accounting in respect of services rendered iii. invoice copies raised on GCC by applicant 3.2 The applicant made the following submissions vide their leter dated 30.05.2022. • write up on the activities undertaken by the applicant: Step Process (1) The organic wet waste collected by the Greater Chennai Corporation(GCC) is unloaded in the corporation's micro compost centers. The Wet waste mostly comprises of vegetables, fruits, leaves, egg shells and food discards. (2) As the Wet waste immediately decomposes, it is forthwith taken into processing by the labourers of the applicant. (3) The Wet waste is shredded in the Shredding machine provided by the GCC. (4) Post Shredding, the shredded wet waste is dumped in the compost pits (5) Cow dung solutions is added into the compost pits to aid the decomposition process (6) The Wet waste undertakes decomposition in the compost pits for a period of 45 days. ....
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.... Applicant along with application, oral submissions made at the time of Virtual hearing and the comments of the Jurisdictional Authority. It is seen that the applicant has entered into an agreement with Greater Chennai Corporation (GCC) for maintaining the micro-compost centers and processing the Wet Waste provided by the GCC at designated locations in Center Region Zones, 7, 9 and 10 in Chennai. The applicant is before us seeking ruling on the following questions: (1) What is the classification of the service viz., "Maintaining the micro-compost centres and processing the wet waste provided by the GCC at designated locations in Center Region Zones 7, 9 & 10 in Chennai? (2) Whether the aforesaid service provided by the Applicant is entitled to exemption under serial No.3 of Notification No.12/2017-Ceentral Tax (Rate), dated 28/07/2017, as amended The questions raised relates to classification of services being supplied and the applicability of a notification to such supply, which are within the ambit of this authority as per Section 97 (2) of the CGST/TNGST Act, 2017 and the application is therefore admitted. 7.1 We find that the applicant has entered into a....
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....nure generated daily and it has be communicated to the respective zonal officer. 7.3 From the scope of work, obligation of the applicant it is seen that the applicant deploys work forces to maintain the Micro Compost Centers, processes the wet waste provided by GCC and hand ovens all the by-product manure to GCC without any charges. The applicant will be paid the service charges which is quoted PMT. From the copy of the Bill submitted, it is seen that the applicant has addressed the Zonal Officer, Zone-9, a bill for the month of December 2021 to March 2022, with overall abstract Month-wise and Tonnage of waste processed. The bill is supported with break-up of Month-wise, Unit-wise/Division-wise(Area-wise), Tonnage handled. The service charges are arrived at based on the tonnage of waste handled and GST is not charged on the service charges billed. 8. With the above factual position, the first question raised by the applicant on classification of the activity is taken up for discussion. Scheme of Classification of Services is provided in the Annexure to Notification No. 11/2017-C.T.(Rate) dated 28.06.2017. SAC 9994 as given in the said Annexure is extracted below: 629 He....
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.... works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. Nil Nil The above entry exempts • Pure Services falling under Chapter 99 • Provided to Central Government/State Government/Union Territory/Local authority • By way of any activity in relation to any function entrusted to a • Panchayat under Article 243 G of the Constitution • Municipality under Article 243 W of the Constitution The first criteria to be satisfied is that the services rendered should be 'Pure services' falling under Service Code 99, in the instant case as it can be seen from the facts listed at para 7 above the applicant is obligated to maintain the Micro compost Centres and process the wet waste provided by GCC using his work force and the GCC will support with the input requirements and facilitate wit....
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....to `Local Authority' by the applicant and the criterion related to recipient is satisfied. 9.3 The next criterion to be verified is whether the activity is a function entrusted to a municipality under Article 243W of the Constitution. Sl.No.6 of The Twelfth Schedule to the Constitution under Article 243 W is as follows: "6. Public health, sanitation conservancy and solid waste management." Further, Rule 15 of the Solid Waste Management Rules 2016, vests the Local Authorities with the responsibilities to prepare and implement effective Solid Waste Management of the waste generated in the limits of said authority. On a cogent reading of Sl.No. 6 of the Twelfth Schedule to the Constitution and Rule 15 of the Solid Waste Management Rules 2016, it is evident that it is the duty of the local authority to effectively handle 'Solid Waste Management'. In the case at hand GCC for 'Solid waste management' has offered the service of the maintenance of Micro composting center to the applicant through the bid process and therefore the final criterion is also satisfied. 10. Based on the above, we find that the work order received from GCC to the applicant for....