No GST on Conservancy Services Provided to Municipality as Activity Falls Under Twelfth Schedule

In re Hari Narayan Singh (GST AAR West Bengal)

The Applicant, a registered proprietorship firm, provides conservancy services to the Howrah Municipal Corporation (HMC) involving the collection and transportation of segregated waste from secondary transfer points to designated dumpsites using its own fuel-operated vehicles. The Applicant sought an advance ruling on whether such services are exempt under Notification No. 12/2017 – State Tax (Rate), particularly under Sl. Nos. 3, 3A, or 4, as activities relating to functions entrusted to a Municipality under Article 243W of the Constitution.

The Authority admitted the application and examined the scope of “pure services,” “composite supply,” and the constitutional framework under Articles 243G and 243W read with the Twelfth Schedule. It was observed that waste management falls under Entry 6 of the Twelfth Schedule, covering public health, sanitation, conservancy, and solid waste management—functions entrusted to municipalities. The Authority held that Howrah Municipal Corporation qualifies as a “local authority” under Section 2(69) of the CGST Act.

Upon reviewing the work orders, the Authority found that the Applicant’s activity involves no transfer of goods and does not constitute a works contract or composite supply. The use and maintenance of vehicles, fuel, and manpower do not result in supply of goods to HMC. Consideration is based solely on the quantity of waste transported. Therefore, the activity qualifies as “pure services” under Sl. No. 3 of Notification No. 12/2017. Sl. No. 3A was held inapplicable as no supply of goods is involved, and Sl. No. 4 was ruled out since the Applicant is not a governmental authority.