Authority for Advance Ruling [West Bengal]: In an application sought for advance ruling on the question, whether conservancy/solid waste management services is exempted from Goods and Services Tax (‘GST’), the two-member bench of Brajesh Kumar Singh and Joyjit Banik held that the applicant’s supply to the Howrah Municipal Corporation (‘HMC’) for operation and maintenance of capacity portable compactor and hook loader is eligible for exemption from payment of tax vide serial number 3-A of the Notification No. 12/2017 – Central Tax (Rate), if the value of goods involved in such composite supply does not exceed 25% of the value of supply.
The applicant submits that the services provided by them is a “Pure service” which is covered under serial number 3 of the Notification No. 12/2017 of Central Tax (Rate) which exempts “pure service” from GST.
The Authority said that the annual maintenance of compactor and hook loader involves supply of goods like spare parts, therefore, the instant supply is not a pure service.
It further opined that the instant supply is a composite supply of goods and services, and such supply can qualify for exemption vide serial No. 3A of the exemption notification only when the value of goods involved in such composite supply does not exceed 25% of the value of supply, and the same is 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 (Article 243G) or Municipality (Article 243W) under the Constitution.
The Authority while ascertaining whether the services provided by the applicant are in relation to any functions entrusted to a municipality under article 243-W of the Constitution, said that the functions entrusted to a municipality as listed in the twelfth schedule include the functions like sanitation conservancy and solid waste management., therefore it was held that the applicant’s services to HMC may be exempted under serial number 3A of the exemption notification if the value of goods involved in such composite supply does not exceed 25% of the value of supply.
[Banchu Das, In re, WBAAR 23 of 2022, decided on 21-10-2022]
Advocate who appeared in this case :
Represented by: Tanmay Ghosh.
*Apoorva Goel, Editorial Assistant has reported this brief.