GST on Cow Dung Collection and Transportation Services
The Rajasthan Authority for Advance Ruling decided that cow dung collection and transport services are taxable, not exempt.
- Ruling
- RAJ/AAR/2026-27/01, dated 11.06.2026
- Dated
- 11 Jun 2026
- 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
- The company asked if cow dung collection services qualify for a NIL GST rate.
- The authority ruled these services are not exempt from GST.
- The activity is classified as a taxable mixed supply of waste management services.
In short
Hadoti Constructions Company Joint Venture asked the Rajasthan Authority for Advance Ruling (AAR) if their contract to collect and move cow dung to a biogas plant was tax-free. The authority examined whether this work qualified for specific exemptions meant for basic transportation services.
What has changed
How it worked before
Many businesses assumed that municipal waste collection and transportation services might qualify for GST exemptions similar to those for public transport or basic logistics.
What has changed
The authority decided that because the company does not issue consignment notes, they cannot be treated as a Goods Transport Agency. Since the service involves both collecting and moving waste, it is a mixed supply taxable at the highest applicable rate under Heading 9994. This means businesses in this sector must now charge GST on these contracts.
Who this affects
Waste management companies, municipal contractors, and businesses providing collection and transportation services for local authorities.
An example
Imagine a company, GreenWaste Solutions, that collects organic waste from city markets to deliver to a composting facility. They might wonder if their service is exempt from GST like basic road transport. Based on this ruling, their service would likely be considered a taxable mixed supply rather than exempt transport, meaning they must collect and pay GST.
What you should do
If you provide similar services, you should review your tax liability with a professional. Remember that an advance ruling only binds the company that asked and its specific tax office; it is not a general law that automatically applies to your business.
If you do nothing
If you assume this ruling does not apply to you and stop collecting GST, you risk a tax demand from your local officer. You would then be liable for the unpaid tax, plus interest and potential penalties for non-compliance. Relying on an incorrect interpretation of your tax obligations can lead to significant financial losses.
The terms explained
- Mixed supply
- A combination of two or more individual services provided together for a single price, which are taxed at the highest rate applicable to any of the individual parts.
- Goods Transport Agency
- A person or business that provides transport services for goods by road and issues a specific document called a consignment note.
- Consignment note
- A formal document issued by a transport agency that acts as a receipt for goods and evidence of a contract for carriage.
The ruling in detail
Authority for Advance Ruling
M/s HADOTI CONSTRUCTIONS COMPANY JOINT VENTURE
RAJ/AAR/2026-27/01, dated 11.06.2026 · Rajasthan
Questions before the authority
- What is the GST rate applicable to the services supplied under this contract, specifically whether the transportation and collection of cow dung qualify for exemption under existing GST notifications?
Facts
The applicant was awarded a work order by the Kota Development Authority for the collection and transportation of cow dung from cattle shelters and nearby villages to a 150 TPD Biogas Plant. The applicant sought an advance ruling on whether these services qualify for a NIL rate of GST under existing exemption notifications.
Ruling
| Question | What the authority ruled |
|---|---|
| Applicability of GST exemption for collection and transportation of cow dung | Not exempt; taxable as a mixed supply Taxable at the highest rate applicable to the services involved, specifically 18% under Heading 9994 |
The authority ruled that the services provided do not qualify for the claimed exemptions. It determined that the activity constitutes a mixed supply of waste collection and transportation, which is taxable at the highest applicable rate.
Reasoning
The authority found that the applicant does not qualify as a Goods Transport Agency because they do not issue consignment notes. Furthermore, the service is not mere transportation but a composite activity of waste collection and movement, rendering the general road transportation exemption inapplicable. Consequently, the activity is classified as a mixed supply under Section 2(74) of the CGST Act, 2017, and is subject to the highest rate of tax under Heading 9994.
Provisions relied on
- Section 97(2) of the CGST/SGST Act, 2017
- Section 2(74) of the CGST Act, 2017
- Section 8(b) of the CGST Act, 2017
- Notification 12/2017-Central Tax (Rate) dated 28.06.2017
For the practitioner
This ruling clarifies that waste collection and transportation contracts involving multiple dispersed sources are treated as **taxable mixed supplies** rather than exempt transportation services. It highlights that the failure to issue a consignment note precludes classification as a Goods Transport Agency. Practitioners should note that this decision effectively denies the NIL rate for similar municipal waste management contracts.
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/1-order_hadoti_construction_co_1_1.pdf
Legibility of the scan, as read: high.
Prepared 11-10-2026.
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