AAR Rules Solid Waste Management Services to Gram Panchayat Exempt from GST:

AAR Rules Solid Waste Management Services to Gram Panchayat Exempt from GST Annonymous Indian Charitable Trust approached the Authority for Advance Ruling, Karnataka, seeking clarification on the GST applicability for solid waste management services provided to a Gram Panchayat in Gantiganahalli Grama Panchayat, Yelahanka Taluk, Bengaluru. The applicant contended that the services rendered included collection, transportation, segregation, recycling and disposal of solid waste, along with maintenance of sanitation in rural areas under the Panchayat’s jurisdiction. He said the services constituted “pure services” as they did not involve any supply of goods or works contract. It was further contended that such activities relate directly to sanitation and public health functions entrusted to Panchayats under Article 243G of the Constitution and therefore should qualify for exemption under Notification No. 12/2017-Central Tax (Rate) dated 29.06.2017. Question Before AAR: Whether solid waste management services provided as pure services to a Gram Panchayat qualify for GST exemption under Notification No. 12/2017 as activities relating to functions entrusted to Panchayats under Article 243G of the Constitution. AAR Decided: The Authority for Advance Ruling, examined the nature of services supplied by the applicant and the scope of exemption provided under Notification No. 12/2017-Central Tax (Rate). The Authority noted that the exemption applies to pure services provided to the Central Government, State Government, Union Territory, local authority or governmental authority by way of any activity in relation to functions entrusted to a Panchayat under Article 243G or to a Municipality under Article 243W of the Constitution. In this case, the services rendered by the applicant involved collection, transportation, segregation, and disposal of waste as well as sanitation management in rural areas. The Authority observed that such activities clearly fall within the ambit of public health and sanitation functions entrusted to Panchayats under the Eleventh Schedule to the Constitution. As the services were supplied to a Gram Panchayat, which qualifies as a local authority, and as the applicant had said that the supply did not involve any goods or works contract. Resultantly, the Authority concluded that the services constituted “pure services” provided to a local authority in relation to functions entrusted to a Panchayat under Article 243G and are eligible for exemption under Notification No. 12/2017-Central Tax (Rate) dated 29.06.2017. To Read Full Judgment, Download PDF Given Below