Public Health, Sanitation, Conservancy and Solid Waste Management eligible for GST Exemption: AAR [Read Order]

Public Health - Sanitation - GST Exemption - Taxscan

The West Bengal Authority for Advance Ruling (AAR) has held that the Public health, sanitation, conservancy, and solid waste management that such service is a function of ‘public health’ entrusted to Municipalities under Article 243W of the Constitution eligible for exemption.

The Applicant is stated to be providing solid waste management service to the Conservancy Department of the Howrah Municipal Corporation and sewer cleansing service to the Sewerage and Drainage Department of HMC.

The HMC is deducting TDS while paying consideration for the above supply in terms of Notification of Central Tax and State Government Order.

The Applicant seeks a ruling on whether the above supply is exempted in terms of Notification No. 1212017- Central Tax (Rate) as amended from time to time (Exemption Notification), and if so, whether the notifications regarding TDS are applicable in his case.

The applicant contended that the Exemption Notification exempts from payment of GST any “pure service” provided to the Central Government, State Government or Union territory or local authority or a governmental authority or a Government Entity 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 applicant also submitted that the recipient, being a municipal corporation, is a local authority also submits copies of the work orders issued, specification and terms and conditions of the work, etc. to establish that he supplies pure service and, therefore, the exemption under Sl No. 3 of the Exemption Notification applies to his supplies.

The bench includes Joint Commissioner, Susmita Bhattacharya and Senior Joint Commissioner, Parthasarathi Dey pronounced the order based on an application filed by M/s Dolphin Techno Waste Management Private Limited.

The Bench observed the clarification of that the Service Tax notification under the service tax-exempts “services provided to the Government, a local authority or a governmental authority by way of water supply, public health, sanitation, conservancy, solid waste management or slum improvement and up-gradation.”

The Circular further explains in relation to the specific issue of ambulance service to the Government by a private service provider (PSP) that such service is a function of ‘public health’ entrusted to Municipalities under Art 243W of the Constitution, and, therefore, eligible for exemption of the Exemption Notification.

 Furthermore, The bench said that the Article 243W of the Constitution that states the powers, authority, and responsibilities of a Municipality, refers to the functions listed under the Twelfth Schedule as may be entrusted to the authority. Sl No. 6 of the Twelfth Schedule refers to public health, sanitation, conservancy, and solid waste management. The Applicant’s supply to HMC is a function mentioned under Sl No. 6 of the Twelfth Schedule, Applicant’s service to HMC, therefore, is exempt under Sl No. 3 of the Exemption Notification.

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