In re SNG Envirosolutions Pvt. Ltd. (GST AAR West Bengal)
Whether services for collection and disposal of bio-medical waste from various clinical establishments provided by the applicant shall be exempted vide serial number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017?
Supplies provided by the applicant to State Government for collection and disposal of bio-medical waste from various clinical establishments shall get covered under entry serial number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 12/2017 State Tax (Rate) dated 28/06/2017.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, WEST BENGAL
1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression ‘GST Act‘ would mean the CGST Act and the WBGST Act both.
1.2 The applicant submits that he has entered into an agreement dated 29.11.2019 with Department of Health Services, Department of Health & Family Welfare, Government of West Bengal for collection and disposal of bio-medical waste from various clinical establishments. In order to fulfil its obligations under the aforesaid agreement, the applicant entered into an agreement with Medicare Environmental Management Private Limited (―Medicare‖) on 20.11.2019 where under Medicare was appointed as a sub-contractor for collection and disposal of bio-medical waste from 05(five) zones.
1.3 The applicant has made this application under sub-section (1) of section 97 of the GST Act and the rules made there under raising following questions vide serial number 14 of the application in FORM GST ARA-01:
(i) Whether the provisions of Entry Number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 and Entry No 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 are applicable to the applicant or not.
(ii) Whether the provisions of Entry Number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 and Entry No 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 are applicable to the sub-contractor of the applicant or not.
(iii) Whether the provisions of Entry Number 75 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 and Entry No 75 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 are applicable to the sub-contractor of the applicant or not.
1.4 The aforesaid question on which the advance ruling is sought for is found to be covered under clause (b) of sub-section (2) of section 97 of the GST Act.
1.5The applicant states that the question raised in the application has neither been decided by nor is pending before any authority under any provision of the GST Act.
1.6 The officer concerned from the Revenue has raised no objection to the admission of the application.
1.7 The application is, therefore, admitted.
2. Submission of the Applicant
Fact of the case as submitted by the applicant along with interpretation of law made by him is reproduced verbatim herein under:
2.1 The Department of Health & Family Welfare, Government of West Bengal floated a Request for Proposal (RfP) NIT No: 093/HFW-40043/13/2018-HA dated 11.02.2019 for selection of Common Bio Medical Waste Treatment Facility (‘CBMWTF‘) Operators for Public Health Facilities in West Bengal.
2.2 A consortium comprising of M/s Spectrum Waste Solutions Pvt Ltd and M/s SNG Mercantile Pvt Ltd participated in the bidding process and submitted its proposal online vide letter dated 29.03.2019. Subsequently, the Govt of West Bengal, vide Letter of Intent No 167(2)-HS(MS)/HF/O/HS(MS)/BMW-01/2019 dated 27.05.2019 (‘LOI‘) selected the aforementioned consortium as an operator of CBMWTF.
2.3 Thereafter, in the light of the RfP and LOI, an agreement dated 29.11.2019 (‘Master Service Agreement‘) was entered into between the Department of Health Services, Department of Health & Family Welfare, Government of West Bengal and the applicant (representing the aforesaid consortium) for collection and disposal of bio-medical waste from various clinical establishments. It is pertinent to state that all such clinical establishments are under the administration of the State Government of West Bengal.
2.4 The applicant submits that pursuant to its selection as an operator of CBMWTF, the applicant entered into various agreements with hospitals for providing facilities in relation to collection and disposal of biomedical waste. One such agreement was entered into with Bauria (Fort Gloster) State General Hospital dated 16.12.2019 wherein it was stated that the agreement concerned was for availing services in accordance with the Master Service Agreement. Thus, on a conjoint reading of both the agreements, it is clear that the applicant is serving the State Government of West Bengal.
2.5 In order to fulfil its obligations under the Master Service Agreement, the applicant entered into sub-contract agreements with Medicare from time to time on 20.11.2019, 01.06.2020 and 01.06.2021 (“Sub-Contract Agreement”) where under Medicare was appointed as sub-contractor for collection and disposal of bio- medical waste from 5 zones namely, Rezinagar (zone 4), Howrah (Zone 6), Katwa (Zone 8), Bankura (Zone 10) & Duttapukur (Zone 12).
2.6 In a nutshell, it is submitted that it is the applicant that is contractually responsible for collecting bio-medical waste from the clinical establishments that are under the administration of the State Government of West Bengal. In order to carry out its contractual responsibilities, the applicant appointed Medicare as a sub-contractor and tasked Medicare with the work of collection and disposal of bio-medical waste for the zones concerned. While the applicant raises the invoices on the clinical establishments which are effectively cleared by the State Government (in terms of Master Service Agreement), Medicare raises invoices on the applicant for the work done by it as a sub-contractor.
2.7 Given the nature of the scope of works to be undertaken by the applicant under the Master Services Agreement and the activities performed by Medicare under the Sub – Contractor Agreement, the applicant is of the view that services provided by the applicant and its sub-contractor “Medicare” are squarely covered under entry Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 and Sl. No 3 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017. Moreover, without prejudice, the service provided by Medicare are also covered under Sl. No. 75 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 and Sl. No 75 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017.
2.8 The applicant has extracted the relevant portions of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 for ease of reference hereunder.
