GST Exemption Available to Pure Services of Repairs and Maintenance of Public Street Lighting to Local Authorities: AAR

The applicant signed an agreement under the name of the partnership firm Akshara for an electrical maintenance contract with the Assistant Engineer, LID & EW, Kayamkulam Municipality on April 28, 2023. The applicant gives pure services to the Municipality. As per the agreement, the contractual value also includes a portion attributable to goods consumed by the applicant during the time period of the contract.

Questions Asked by Applicant

The applicant filed an application to get an advance ruling for the following question:

1. Whether the activity of the applicant of providing pure services of repairs and maintenance of Public street lighting infrastructure and supply of manpower based on the work order issued by the Local authorities of Kayamkulam Municipality is eligible for GST?

2. What is the applicable SCA entry and rate of tax if the 1st point is affirmative?

3. Whether the supply of Street Light Maintenance Services to various Departments under Local Authority provided by the applicant i.e.,
Kayamkulam Municipality is eligible for exemption from GST, as per Sr. 3 of Notification Number 12/2017- Central Tax (Rate) New Delhi, dated 28th June, 2017 as amended, being pure services per the definition and the services rendered thereby being listed in article 243G and 243W of Constitution as functions pertaining to Panchayat and Municipality.

4. Whether the services of Street Light Maintenance to various Government Authorities and Government Entities provided by the applicant, ie., Kayamkulam Municipality where the value of goods consumed is less than 25% of total contract value is eligible for exemption from GST, as provided under Sr. 3A of Notification Number 12/2017-Central Tax (Rate) New Delhi, dated 28th June,2017 as amended vide notification 16/2021 – Central tax (rate) dated 18-11-2021 being pure services as per the definition and the services rendered thereby being listed in article 243G and 243W of Constitution as functions pertaining to Panchayat and Municipality?

Ruling by Kerala AAR

As per the Kerala Authority for Advance Ruling:

Ans 1: The activity of an applicant giving pure services of repairs and maintenance of Public street lighting infrastructure and supply of manpower based on the work order is taxable under GST. However, this activity is exempted under Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017.

Ans 2: SCA entry is not applicable as the supply is exempted.

Ans 3: The supply of Street Light Maintenance Services to various Departments under the Local Authority provided by the applicant is eligible for exemption.

Ans 4: The service of “maintaining street lights for various government authorities by the applicant (Kayamkulam Municipality), where the value of consumed goods is less than 25% of the total contract value” is also exempted from GST.