The Karnataka Authority of Advance Ruling (AAR) in the case of M/s Indian security and personal arrangements vide Advance Ruling No. KAR ADRG 22/ 2022 dated 12.08.2022, has held that the GST is not payable on services provided to the horticulture department for cleaning and sweeping of lawns, garden path areas, segregation and transportation of garbage.
In this case the AAR, has observed that GST is not payable on the services proposed to be provided to the Horticulture Department for the supply of manpower for garden maintenance on an outsourced basis to the Department of Horticulture.
The applicant submitted that the proposed activities of cleaning and sweeping of lawns and garden path areas; segregation and transport of garbage; and supply of manpower for garden maintenance, are intended to be provided to the Government Department of the State of Karnataka, i.e., the Department of Horticulture.
Horticulture is the art and science of growing plants and includes landscaping, soil management, designing, construction and maintenance of gardens. The purpose of the work undertaken by the Horticulture Department is to ensure that the gardens are aesthetically beautiful, provide excellent ambience, and provide an authentic environment for visitors and the public.
The contention of the applicant was that the Department of Horticulture would fall within the definition of “government” for the purposes of GST and, as such, pure services received by it would be exempt from GST.
The AAR observed that in order to claim the exemption on supply of services under Entry no. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, two conditions should be satisfied i.e.:
- Pure Services (excluding works contract service or other composite supplies involving any goods) provided to the Central Government, State Government or Union Territory or Local Authority or a Governmental Authority.
- by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution.
The applicant was providing manpower services for cleaning and sweeping of lawns and garden path areas; segregation and transport of garbage in Cubbon Park; and maintenance of gardens in Siri Horticulture Garden, Ooty, Tamilnadu. It was in relation to the function entrusted to a municipality under article 243W of the constitution, which is covered by the Entry No. 12 of the Constitution, which says “provision of urban amenities and facilities such as parks, gardens, and playgrounds”. The manpower services were provided to the Horticulture Department, Government of Karnataka.
The AAR observed that the applicant is providing services to the state government, which is covered by the 12th Entry of the twelfth schedule of the constitution, which says “provision of urban amenities and facilities such as parks, gardens, and playgrounds”.
The AAR held that the services proposed to be provided by the applicant to the Department of Horticulture for cleaning and sweeping of lawns and garden path areas and segregation and transport of the garbage are liable for GST at NIL rate as per Entry No. 3 of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017.
Further, the services provided by the applicant for supply of manpower for garden maintenance on outsource basis to the Horticulture Department are liable for NIL rate of GST as per Entry No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
