18% GST Applicable On Services provided to State Urban Development Agency for transfer of Municipal Wet Waste processing facility based under Swachh Bharat Mission: AAR

GST, AAR,

The West Bengal Authority of Advance Ruling (AAR) held that 18% GST is applicable on supply of services to be provided by the applicant to State Urban Development Agency for design, build, finance, operate and transfer of Municipal Wet Waste processing facility based on Composting and/or Bio-methanation Technology, setting up Semi-Automatic Material Recovery Facility for Dry Waste and construction of Sanitary Landfill along with operation & maintenance under Swachh Bharat Mission/Mission Nirmal Bangla.

Facts

The applicant namely Simoco Telecommunications (South Asia) Limited submits that the State Urban Development Authority (SUDA) has accepted his offer for design, build, finance, operate and transfer of Municipal Wet Waste processing facility based on Composting and/or Bio-methanation Technology, setting up Semi-Automatic Material Recovery Facility for Dry Waste and construction of Sanitary Landfill along with operation & maintenance for 10 years (Renewable) under Swachh Bharat Mission/Mission Nirmal Bangla and accordingly has issued “Letter of Acceptance cum Work Order” to him to carry out the said activities in respect of a number of municipalities in West Bengal.

Issues Raised?

The applicant has made this application under sub section (1) of section 97 of the GST Act and the rules made there under raising issues related to classification of goods/services as per work order and applicable GST rate.

AAR’s Observation 

The bench of Brajesh Kumar Singh and Joyjit Banik observed that SUDA, being a registered society, is not a Panchayat or a Municipality or any Board or Cantonment as specified in the above-referred definition of local authority. Further, no documents have been produced before us wherefrom it can be established that SUDA is an authority who is legally entitled to and entrusted by the Government with the control or management of a local fund. Therefore, SUDA cannot be held as a local authority as defined in clause (69) of section 2 of the GST Act and the supply involved in the instant case thus fails to qualify for exemption vide serial number 3 or 3A of the Exempt Notification.

Name of the applicant: Simoco Telecommunications(South Asia) Limited

Case No. WBAAR 11 of 2022

Date: May 12, 2022

Click here to read the Order/Judgment 

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