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GST on Security and Scavenging Services to Govt not Exempted: AAR [Read Order]

Security Services - GST - Taxscan

The Authority for Advance Rulings (AAR), West Bengal has held that no GST exemption has been granted to the Security and Scavenging Services to the hospital under the Government.

The Applicant is a registered society providing Security Services and Scavenging Services to various hospitals under the State Government as well as the Central Government. Through an advance ruling application, the applicant sought for a ruling as to whether exemption from payment of GST is available to them in terms of Notification No 12/2017-CT(Rate) dated 28.06.2017.

The applicant is supplying Security Guards & Scavenging Services to the medical colleges and hospitals of West Bengal without and also to the Central Govt. Cancer Institute. According to the Applicant, the said Notification exempts the services provided by them by way of 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.

The authority noted that a careful read of conditions laid down under the Exemption Notification makes it clear that exemption from GST is granted under Serial No 3 to the Pure services (excluding 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 or a Governmental 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.

The authority noted that a study of the two lists, as given above, makes it clear that “Security Services” provided to Government Hospitals and Medical Colleges, as institutions of Central/State/District/Local authorities, are clearly not covered under the either list.

“The services provided under the head “Scavenging Services”, according to the Applicant’s submission, includes manual cleaning, duties of attendant or operator of trolleys. Article 243G under Serial No 26 covers “Health and sanitation, including hospitals, primary health centres and dispensaries”. Article 243W under Serial No 7 covers “Public health sanitation, conservancy and solid waste management”. No other entries in the Eleventh or the Twelfth Schedules of the Constitution appear relevant while examining applicability of the Applicant’s services bundled as “Scavenging Services”,” the authority said.

“It means inter alia any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicine in India and includes services by way of transportation of patient to and from a clinical establishment. It is classified under SAC 99931. It does not include any of the services the Applicant bundled under the description “Scavenging Services”. Again, „Sanitation and similar services‟ are classified under SAC 99945. It includes sweeping and cleaning, but only with reference cleaning of a road or street. Cleaning of hospital premises is not, therefore, classified under “Sanitation or similar service”. The services the Applicant bundled under the description “Scavenging Services” are, therefore, not exempt under Sl No. 3 of the Exemption Notification,” the authority said.

To Read the full text of the Order CLICK HERE
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