GST on sanitation and conservancy services supplied to army and other Central & State Government Departments
CBIC issued Circular No. 177/09/2022 dated 3rd August 2022 for clarifying various GST rate-related issues. One such issue is GST on sanitation and conservancy services supplied to the army and other Central & State Government Departments by the service provider. The CBIC issued a clarification to remove confusion on this issue on the basis of representations received from the stakeholders.
Clarification on the above subject is as follows:
- Municipalities and Panchayats and other local authorities such as Cantonment Boards listed in Section 2(69) of the Central Goods and Services Tax act, 2017 carry out functions entrusted to them under articles 243W & 243G of the Constitution respectively.
- Functions that may be entrusted to panchayats and municipalities are listed in Schedules 11 & 12 of the Constitution. Central Government, State Governments & Union Territories also perform functions listed in Schedule 11 & 12 such as irrigation, public health, etc.
- Services by Central Government, State Government, Union Territory, or any local authority by way of any activity in relation to a function entrusted to a Panchayat under article 243G of the constitution or to a municipality under article 243W of the constitution have been declared as ‘neither a supply of goods nor a supply of service’ vide notification no. 14/2017- Central Tax (Rate) dated 28.06.2017.
- The exemption under entry 3& 3A of notification 12/2017- Central Tax (Rate) dated 28.06.2017 has been given on pure services & composite supplies procured by the Central Government, State Government, Union Territories, or local authorities for performing functions listed in the 11th and 12th schedule of the constitution.
- It is clarified that if such services are procured by the Indian Army or any other Government Ministry/Department which does not perform any functions listed in the 11th and 12th Schedule, in the manner as a local authority does for the general public, the same is not eligible for exemption under Sl. No. 3 and 3A of Notification 12/2017- Central Tax (Rate).
