Cleaning services supplied to Railways Liable to GST : Delhi AAR |Delhi AAR confirmed Cleaning services supplied to Railways Liable to GST |
Facts of the case: VPSSR Facilities, had been awarded a contract by the Northern Railway for providing services in relation to housekeeping, cleaning, sanitation, waste management, locomotives cleaning and washing. The Railways refused to pay GST to the applicant on the ground of exemption under S.No. 3 of the Notification No. 09/2017-Integrated Tax(Rate) dated 28.06.2017. As per this notification, services are exempt from GST only if services offered are, Pure Services without any supply of material & are in relation to any function entrusted to the Municipality as per Article 243W of the Constitution of India.In this regards case has been heard by DELHI AAR whether services supplied by VPSSR Facilites to Northen Railways exempt.
Below are the facts of the case and judgement ofDELHI AUTHORITY FOR ADVANCE RULING.

DELHI AUTHORITY FOR ADVANCE RULING

GOODS AND SERVICES TAX
DEPARTMENT OF STATE TAXES
FLOOR, VYAPAR BHAWAN, IP ESTATE, NEW DELHI -110002

ADVANCE RULING NO. 06/DAAR/2018 dated 23.04.2018

(In Application No: 06/DAAR/2018 dated 24.01.2018)

Details of Questions on which Advance Rulingis requested:
8. Whether the contract for Railway station sanitation and / or cleaning, Train cleaning & Railway Premises cleaning involving:
(a) Mechanized/ Comprehensive cleaning at Railway Stations.
Station Building Cleaning, Platform Cleaning, Track Cleaning, Office & Waiting hall cleaning, Toilet cleaning, Circulating area cleaning etc.
(b) Mechanized cleaning of sheds
Shed floor, pits, urinals, desilting of manholes, underground drains and open drains, disposal of Industrial waste to Dumping ground, Loading of Ferrous Scrap, Cutting of grass and shrubs and removal of cobwebs etc.
(c) Providing On-Board Housekeeping Services in Trains
Cleaning of toilets, compartments, seats etc.
(d) Railway Building & Office cleaning.
Cleaning and upkeep of Office Chambers, rooms, cabins, corridors, Halls, roofing, circulating areas, toilets, metalled road and lawns etc.
(e) Mechanized Cleaning of Trains
Coaches of Trains, and Housekeeping of depot premises etc.
(f) Comprehensive Mechanized cleaning of railway colonies.
Cleaning of road and desilting of surface drains, manhole, gully trap and latrine system of various size and depth and maintenance of the same in the running condition of colony area, and removal of accumulated garbage silt muck etc to the nominated railway dustbin.
(g) Removal and disposal Garbage etc from railway colonies.
Conservancy conrtact for daily removal of solid waste/ rubbish/ refuse / hedge cuttings etc. from the dustbins/ heaps or nominated sites of Railway Colony and other Railway premises.
(h) Removal and disposal of Garbage etc from railway stations.
Conservancy contract for daily removal of solid waste/ rubbish/ refuse / hedge cuttings etc. from the dustbins/ heaps or nominated sites of Railway Station.
Would be exempt from GST vide S. No. 3 of Notification No. 9/2017 – Integrated Tax (Rate} dated 28.06.2017 (as intimated by Northern Railway vide its letter dated 20.11.2017), what would be the impact of GST exemption, if the above contract is pure service contract or work contract (involving sanitation labour and material}.

Views of the Applicant:

Their business is to execute service contract, i.e. cleaning, sanitation, manpower supply, washing, housekeeping, etc. in Delhi and outside Delhi, station, building cleaning, platform cleaning, track cleaning, office and waiting hall cleaning, toilet cleaning, circulating area cleaning, shed floor, pits, urinals, desilting of manholes, underground drains and open drains, disposal of industrial waste to dumping ground, loading of ferrous scrap, cutting of grass and shrubs and removal of cobwebs. So the same shall be classified under the levies and GST@ NIL taxable.
Further, as per the FAQ of CBEC in Q.No. 16, it is clearly specified in this answer that the functions entrusted to a municipality under the Twelfth Schedule to Article 243W of the Constitution. In point no. (f} public health, sanitation conservancy and solid waste management.
As per the above explanation, applicant services as mentioned above, are covered in heading no. 9994 – Sewage and waste collection, treatment and disposal and other environmental protection services. Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets.

Ruling

45. It is held that the cleaning services supplied by the applicant to the Northern Railways are not exempted under S. No. 3 of the Notification No. 09/2017 – Integrated Tax (Rate) dated 28.06.2017, as amended by Notification No. 2/2018 – Integrated Tax (Rate) dated 25.01.2018 and parallel Notifications of CGST and SGST.
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