GST Exemption Available on PHED’s Jal Jeevan Mission Support Services: AAR

The West Bengal Authority for Advance Ruling (WBAAR) has ruled that a wide range of data validation, GIS mapping, survey, and training-related services provided to the Public Health Engineering Directorate (PHED), Government of West Bengal, under the Jal Jeevan Mission (JJM) qualify as ‘pure services’ and are therefore exempt from GST under Entry 3 of Notification No. 12/2017–Central Tax (Rate). The bench of Shafeeq S. and Jaydip Kumar Chakrabarti has observed that the PHE Directorate of Government of West Bengal has mainly focused on delivering safe and reliable drinking water to rural households of the state through a comprehensive network of Piped Water Supply Schemes (PWSS). This is a part of the larger nationwide effort under the JJM launched by the Government of India in 2019. The primary goal of JJM is to provide Functional Household Tap Connection (FHTC) to every rural household ensuring access to adequate quantity and quality of potable water. Under this scheme the PHE Directorate of the Government of West Bengal has provided nearly 96.89 lakhs of FHTCs as of now. The data in relation to installation of FHTC, regularity and duration of water supply, installation of Piped Water Supply Schemes (PWSS) etc. are monitored on day-to-day basis. In order to effectively manage this extensive programme the PHE Directorate has integrated advanced technologies into its operations. For this purpose the directorate has implemented digital asset management system to oversee the progress of the work undertaken by it. The utilisation of GIS tools and analysis of WebGIS data plays a crucial role in respect of data management. The work orders referred to here are related to this aspect of functioning of the PHE Directorate and also for organising orientation programmes for stakeholders. All these activities are related to development of software and application of certain software. There is no supply of goods in any form. The ruling brings clarity to the tax treatment of technology-driven support services increasingly used by government departments in large-scale infrastructure and welfare projects, particularly in the drinking water sector. The applicant, a GST-registered service provider, approached the Authority seeking clarity on whether multiple services supplied to PHED divisions across West Bengal would be eligible for GST exemption. These services primarily relate to monitoring, validation, mapping, and assessment of Piped Water Supply Schemes (PWSS) and Functional Household Tap Connections (FHTCs) implemented under the Jal Jeevan Mission. PHED, an arm of the Government of West Bengal, is responsible for providing safe and reliable drinking water to rural and select urban areas of the state. As part of JJM, PHED oversees thousands of water supply schemes and nearly one crore household tap connections, supported by advanced digital platforms, GIS tools, and field-level verification mechanisms. The Authority examined work orders covering four broad categories of services. Firstly, field-level data validation of Functional Household Tap Connections (FHTCs) using pictorial and documentary evidence to prevent duplication, improve data accuracy, and ensure error-free databases. Secondly, organising orientation and training programmes for Implementation Support Agencies (ISAs), District Project Management Units (DPMUs), and engineering officers on functionality assessment using the Jal Mitra mobile and web applications. Thirdly, digital structuring of pipeline alignments and asset mapping through surveys and GIS-based preparation of scheme maps. Finally, collection of detailed field information of headwork sites and pump houses, including land measurement using DGPS and visualisation of operational features. The core question before WBAAR was whether these services could be classified under Entry 3 of Notification No. 12/2017, which grants GST exemption to, “Pure services (excluding works contract or composite supplies involving goods) provided to the Central Government, State Government or local authority in relation to functions entrusted to Panchayats under Article 243G or Municipalities under Article 243W of the Constitution.” After a detailed examination of the contracts, scope of work, and constitutional provisions, the Authority held that the services involved no supply of goods, either directly or incidentally, and therefore qualify as pure services. The recipient of the services, PHED, is a State Government department, satisfying the recipient condition under the exemption notification. The activities are directly related to drinking water supply, which is a constitutionally recognised function under Article 243G (Eleventh Schedule – Drinking Water) for Panchayats, and Article 243W (Twelfth Schedule – Water Supply) for Municipalities. The services form an integral part of implementing and monitoring the Jal Jeevan Mission, a flagship national programme aimed at providing potable drinking water to rural households. The WBAAR ruled that services relating to FHTC data validation, GIS mapping, asset surveys, training programmes, and performance evaluation provided to PHED are exempt from GST under Entry 3 of Notification No. 12/2017. Even the services initially described as “potential services” are eligible for exemption, as supporting work orders were subsequently produced. Questions regarding alternative classification and GST rate at 18% did not arise, as the exemption was upheld. Ruling Details Applicant’s Name: Amit Kumar Mukherjee Ruling Date: 09/12/2025 Click Here To Read Ruling Read More: Fake GST Registrations Using Forged PAN, Aadhaar Lead to Over Rs. 3,000 Crore Tax Evasion Uncovered

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