Contracts With Municipalities Towards Supply Of Solid Waste Management, Except Bio-CNG Is Exempted From GST: AAR

The two-member bench of G. Venkatesh and K. Latha has ruled that contracts entered into with various city corporations and municipalities towards the supply of pure services towards the removal of legacy waste dumped at dump sites through the bio-mining process are exempted from GST.

The applicant has more than 18 years of experience in collection and transportation (C & T). They are handling about 800 metric tonnes of waste per day from different urban local bodies. They have more than 2000 employees on the ground performing C&T and a fleet of 150+ vehicles. The waste is produced in different areas but has a need to be assembled at a single point, which makes collection and transportation an integral and vital part of waste management. The C&T process involves the collection of biodegradable and non-biodegradable waste either from specific households or streets and transporting those using suitable vehicles to a designated disposal area. The applicant has partnered with the corporations of Tirupur and Tirunelveli and many other municipalities to carry out the primary and secondary collection and transportation.

The applicant has sought an advance ruling on the issue of whether contracts received from various city corporations and a municipality towards solid waste management are exempted from GST vide Sl.No.3 of Notification 12/2017-CT. (Rate) dated 28.06.2017.

Yet another issue raised was whether contracts received from various city corporations and municipalities towards the removal of legacy waste dumped at dump sites through the bio-mining process are exempted from GST vide Sl.No.3 of Notification 12/2017-CT. (Rate) dated 28.06.2017.

The AAR observed that the contract entered into for the conversion of wet waste into BIO-CNG does not satisfy the first criterion of being 'Pure services' and is found not eligible for exemption under SI.No.3 Notification 12/2017- CT.(Rate) dated 28.06.2017(as amended).

The AAR found that the contracts received from various city corporations and municipalities towards the removal of legacy waste dumped at dump sites through the bio-mining process are "pure services" rendered to a local authority. The activity is a function entrusted to a municipality under Article 243W of the Constitution.

Applicant's Name: Srinivas Waste Management Services Private Limited

Advance Ruling No. 23/ARA/2022

Dated: 30.06.2022

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