Facts of the Case

In this case, the applicant was engaged by Howrah Municipal Corporation to provide conservancy services. The work involved carrying segregated municipal waste from the secondary transfer point to the designated dumpsite using the applicant’s own fuel-operated vehicles. The contract required the applicant to collect segregated waste from specified areas of the municipal corporation and transport it to the designated dumpsite. The applicant was responsible for providing vehicles, maintaining them, and operating them, while the consideration was determined on the basis of quantity of garbage transported (per metric ton).

The Applicant sought advance ruling on whether such services provided to the municipal corporation would be exempt from GST under Serial Nos. 3, 3A, or 4 of Notification No. 12/2017-Central Tax (Rate), on the ground that they relate to municipal functions under Article 243W of the Constitution of India. The Revenue also examined the issue and stated that the activity involved solid waste collection and transportation, which is a municipal function under the Twelfth Schedule of the Constitution. It further observed that the activity did not involve transfer of goods and therefore appeared to qualify as pure services provided to a local authority.

Issue:

Whether the service of transporting segregated municipal waste from transfer points to dumpsites for a municipal corporation using the contractor’s own vehicles qualifies for GST exemption under Notification No. 12/2017-Central Tax (Rate) as a service relating to functions entrusted to a municipality under Article 243W of the Constitution.

Held That:

The Authority observed that the exemption under Serial No. 3 applies where the following conditions are satisfied:

• The service must be a pure service, meaning it should not involve supply of goods or works contract.
• The service must be provided to the Central Government, State Government, Union Territory, or a local authority.
• The service must relate to functions entrusted to a Panchayat or Municipality under Articles 243G or 243W of the Constitution.

In the present case, the Authority noted that Howrah Municipal Corporation qualifies as a “local authority” under Section 2(69) of the CGST Act. Further, solid waste management and sanitation fall within Entry 6 of the Twelfth Schedule under Article 243W.

The Authority also found that the activity of transporting waste using the contractor’s own vehicles did not involve any transfer of property in goods to the municipal corporation. The vehicles, fuel, and machinery used were only means for performing the service and did not constitute supply of goods. Therefore, the activity constituted pure services provided to a local authority in relation to municipal solid waste management, and accordingly qualified for exemption.

The Authority further clarified that Serial No. 4 of the notification was not applicable because it covers services provided by a governmental authority, whereas the applicant was a private contractor. Serial No. 3A was also not applicable since there was no composite supply involving goods.

The West Bengal, AAR held that the services provided by the applicant qualify for exemption under Serial No. 3 of Notification No. 12/2017-Central Tax (Rate). Accordingly, the Authority ruled that the services fall squarely under Serial No. 3 of Notification No. 12/2017 and are exempt from GST.

Case Name: In Re: Hari Narayan Singh dated 27.02.2026