GST Exemption for Solid Waste Management Services TN/114/AAR/2023
Bio-mining and land reclamation services provided to a municipal corporation are exempt from GST as pure services.
- Ruling
- Advance Ruling No.114/AAR/2023 Dated:17.11.2023
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Gorantla Geosynthetics asked if their waste management services were GST exempt.
- The authority classified the work as pure services for a local authority.
- Services provided to the Tumkur City Corporation are exempt from GST.
- The ruling confirms these activities fall under public health and sanitation functions.
In short
The company asked the Authority for Advance Ruling (AAR) if their waste management work for a city corporation was taxable under the Goods and Services Tax (GST). They specifically wanted to know if they qualified for an exemption meant for 'pure services' provided to local government bodies.
What has changed
How it worked before
Businesses were often uncertain whether specialized environmental remediation work for municipal bodies qualified for the same tax exemptions as basic sanitation services.
What has changed
The authority ruled that bio-mining and land reclamation are 'pure services' related to public health. Because these are provided to a local authority, they are exempt from GST under Notification No. 12/2017. This means contractors performing similar municipal waste projects can claim this exemption.
Who this affects
Contractors and environmental service providers working on solid waste management or land reclamation projects for municipal corporations.
An example
Imagine a company, GreenEarth Solutions, is hired by a municipal corporation to clear a legacy waste dump site. They wonder if they should charge 18% GST on their invoice. Based on this ruling, if their work is classified as a pure service for a local authority, they may be eligible for the same GST exemption.
What you should do
If you perform similar work, review your contract to confirm your client is a 'local authority' as defined by law. Remember that an advance ruling only binds the company that asked and their specific tax officer; it is not a universal law that automatically applies to your business.
If you do nothing
If you assume this ruling applies to you and stop charging GST without a formal opinion for your own business, you risk a tax demand. If your local tax officer disagrees with your classification, you will be liable for the unpaid tax, interest, and potential penalties.
The terms explained
- Pure services
- Services where the provider does not supply any significant physical goods or materials as part of the contract.
- Local authority
- A government body like a municipal corporation or panchayat that is responsible for local administration and public services.
- Bio-mining
- A process of using microorganisms to treat and stabilize legacy waste at old dump sites.
The ruling in detail
Authority for Advance Ruling
Gorantla Geosynthetics Private Limited
Advance Ruling No.114/AAR/2023 Dated:17.11.2023 · Tamil Nadu
Questions before the authority
- Classification of the services provided by the applicant.
- Whether services provided by the applicant are exempted under Sl.No.3 of Notification No.12/2017 dated 28.07.2017 as amended?
- Whether the service recipient i.e., M/s.Tumkur Smart city Corporation is a "Governmental Authority" as per the definition of Notification No.12/2017 - CT dated 28.06.2017?
Facts
The applicant is engaged in providing solid waste management services, specifically bio-mining and land reclamation of an existing dump site for the Tumkur City Corporation. The project was awarded following a tender process, and the applicant is responsible for the segregation, treatment, and disposal of legacy waste. The applicant sought an advance ruling to determine the taxability and eligibility for exemption of these services.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification of services | SAC 9994, attracting 18% GST (9% CGST + 9% SGST, or 18% IGST) None |
| Exemption under Notification No.12/2017 | Exempted in terms of Sl.No.3 of the notification Applicable to services provided to Tumkur City Corporation |
| Status of Tumkur Smart City Corporation | Not covered under Section 97(2) of the CGST/TNGST Act, 2017 Authority refrained from giving any ruling |
The authority ruled that the services provided by the applicant are classified under SAC 9994 and are subject to 18% GST. However, it concluded that these services are exempt from GST when provided to the Tumkur City Corporation, as it qualifies as a local authority performing functions entrusted under the Constitution. The authority declined to rule on the status of Tumkur Smart City Limited, stating it was not a relevant question for the applicant's tax liability.
Reasoning
The authority determined that the applicant's activities constitute pure services provided to a local authority in relation to functions listed in the Twelfth Schedule of the Constitution, specifically public health and sanitation. It relied on the definition of local authority under Section 2(69) of the CGST Act and the exemption provided under Sl.No.3 of Notification No.12/2017-Central Tax (Rate). The authority found that the Tumkur City Corporation is a **local authority** and the services qualify as **pure services**. Consequently, the exemption applies to the supply of these services to the corporation.
Provisions relied on
- Section 98(4) of the CGST Act, 2017
- Section 103(1) of the CGST Act, 2017
- Section 97(2) of the CGST Act, 2017
- Section 2(69) of the CGST Act, 2017
- Notification No.12/2017-Central Tax (Rate) dated 28.06.2017
- Notification No.11/2017-Central Tax (Rate) dated 28.06.2017
For the practitioner
This ruling confirms that bio-mining and site remediation services provided to a municipal corporation qualify for the **GST exemption** for pure services under Notification No.12/2017. It provides a clear precedent for contractors working on municipal solid waste projects. Practitioners should note that the ruling does not extend to entities like Special Purpose Vehicles (SPVs) if they are not considered local authorities.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/114_gorantla.pdf
Legibility of the scan, as read: high.
Prepared 13-10-2026.
About Patron Accounting LLP
Patron Accounting LLP is a CA and CS-led accounting and compliance firm that has been working with businesses across India since 2019. We handle the work that keeps a company correct with every department it answers to: day-to-day bookkeeping and accounting, GST registration and returns, income tax filing and assessments, TDS, payroll and PF/ESI, company and LLP incorporation, ROC and MCA compliance, statutory and internal audit, physical stock and inventory audits, trademark and other registrations, and the certificates and reports that banks, buyers and regulators ask for.
Our clients range from a first proprietorship registering for GST to established companies running operations across several states. Much of our work is exactly this: reading what a department has published and telling a business, in plain terms, whether it changes anything for them.
We operate from five offices and serve clients across the rest of India remotely:
- Pune (HQ): RTC Silver, B4-708, Sai Satyam Park, Wagholi, Pune, Maharashtra 412207
- Mumbai: 104, Rajshila Building, 597 J.S.S. Road, Marine Lines, Mumbai 400002
- Delhi: 3rd Floor, B-6/154-155, Sector 5, Rohini, Delhi 110085
- Gurugram: Pioneer Urban Square, B109, Golf Course Ext Road, Sector 62, Gurugram 122098
- Ahmedabad: Phoenix Tower, 1107, near Commerce Six Road, Drive In Road, Navrangpura, Ahmedabad, Gujarat 380009
If anything on this page affects you and you would like somebody to look at your own position, we are glad to help. Call +91 94594 56700, write to sales@patronaccounting.com, or visit patronaccounting.com. The first conversation costs nothing.