GST Not Payable on Solid Waste Services as They Are Pure Services to Gram Panchayat

In re Annonymous Indian Charitable Trust (GST AAR Karnataka)

The applicant, a charitable trust based in Bengaluru, sought an advance ruling under Section 97 of the CGST/KGST Act, 2017 regarding the applicability of GST exemption on solid waste management services provided to a Gram Panchayat. The applicant provides services in Gantiganahalli Grama Panchayat, Yelahanka Taluk, North Bengaluru. These services include collection and transportation of solid waste from rural areas, segregation and processing of waste, recycling and disposal at authorized facilities, street sweeping, drain cleaning, and conducting public awareness programmes on waste segregation and sanitation. The applicant stated that these activities are “pure services” and do not involve supply of goods or works contract services.

The applicant contended that the services are directly related to functions entrusted to Panchayats under Article 243G of the Constitution, particularly the functions related to health and sanitation listed in the Eleventh Schedule. It was also submitted that Gram Panchayats qualify as “local authorities” under Section 2(69) of the CGST/KGST Act. On this basis, the applicant claimed exemption under Entry No.3 of Notification No.12/2017–Central Tax (Rate) dated 29.06.2017, which exempts pure services provided to the Central Government, State Government, Union Territory, or local authority in relation to functions entrusted to Panchayats or Municipalities.