Services Provided For Collection And Disposal Of Bio-Medical Waste To State Government Is Exempt From Gst: West Bengal AAR

The West Bengal Bench of the Authority for Advance Ruling (AAR) has ruled that services provided for collection and disposal of bio-medical waste to the State Government is exempt from GST. The Bench, consisting of members Brajesh Kumar Singh and Joyjit Banik, held that advance ruling cannot be sought with respect to the services provided by a sub-contractor to the applicant. The Bench added that a ruling provided on an application filed by the recipient of the services would not be binding on the supplier, and thus the ruling would lose its relevance and applicability. The Applicant SNG Envirosolutions Pvt Ltd entered into an agreement, termed as a Master Service Agreement, with the Department of Health Services, Government of West Bengal, for the collection and disposal of bio-medical waste from various clinical establishments located in the state. The Applicant raises invoices on the clinical establishments which are cleared by the State Government in terms of the Master Service Agreement. Also, the Applicant appointed Medicare as a sub-contractor and tasked it with the work of collecting and disposing of the bio-medical waste for the concerned zones. Medicare raises invoices on the Applicant for the work done by it as a sub- contractor. The Applicant filed an application before the West Bengal Bench of the Authority for Advance Ruling (AAR) seeking advance ruling on whether the provisions of Entry No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 and Entry No. 3 of Notification No. 12/2017 State Tax (Rate) dated 28/06/2017, were applicable to the Applicant or not. The Applicant also raised the query as to whether Entry No. 3 and Entry No. 75 of the said Notification is applicable to Medicare, the sub-contractor of the Applicant. The said Notifications, under Entry No. 3, provide that pure services, excluding works contract service, provided to the Central Government, State Government, Union territory, local authority or a Governmental authority, by way of any activity related to any function entrusted to a Panchayat under Article 243G of the Constitution or related to any function entrusted to a Municipality under Article 243W of the Constitution, are eligible for exemption from payment of GST. Entry No. 75 of the said Notification exempts services provided by operators of bio-medical waste treatment facility to clinical establishments for treatment or disposal of bio-medical waste, from payment of GST. The AAR ruled that the services provided by the Applicant for collection and disposal of bio- medical waste from various clinical establishments is a matter listed in the Eleventh and the Twelfth Schedule of the Constitution and is in relation to the functions entrusted to a Panchayat under Article 243G and to a Municipality under Article 243W of the Constitution. Therefore, the AAR held that the services provided by the Applicant would be covered by Entry No. 3 of the said Notifications and the services provided by it would be exempt from payment of GST. However, with respect to the query raised by the Applicant as to whether the said Notification applied to its sub-contractor Medicare, the AAR observed that an application for advance ruling can be filed by the supplier in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by him. The AAR held that with respect to the supply undertaken by Medicare, the Applicant was not the supplier but a recipient of the services. The AAR ruled that since Medicare raised invoices on the Applicant for the work done by it as a sub- contractor, and since the Applicant was liable to pay the consideration to Medicare, there was a supply by the sub-contractor to the main contractor i.e., there was a supply of services by Medicare to the Applicant. The AAR observed that under Section 103 of the GST Act a ruling pronounced by the AAR is binding only on the applicant and on the concerned jurisdictional officer. The AAR held that if the AAR pronounced a ruling on an application filed by the recipient of the services and declared the inward supply to be exempt, however, since the same is not binding on his supplier, the supplier may not follow the ruling and in such a scenario the ruling would lose its relevance and applicability. "Any provisions of the Law, therefore, should not be interpreted in a way which defeats the very purpose of the objective and purpose of the law provision. We are therefore of the view that in the subject application, the applicant cannot seek an advance ruling in relation to the supply where he is a recipient of services." Therefore, the AAR ruled that the supplies provided by the Applicant to the State Government for collection and disposal of bio-medical waste from various clinical establishments would be covered by Entry No. 3 of Notification No. 12/2017-Central Tax (Rate) and Entry No. 3 of ...

Services Provided For Collection And Disposal Of Bio-Medical Waste To State Government Is Exempt From Gst: West Bengal AAR

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Services Provided For Collection And Disposal Of Bio-Medical Waste To State Government Is Exempt From Gst: West Bengal AAR

Parina Katyal

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INR 1099+GST

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