• Dated 23^rd March, 2026

GST Exemption for Waste Management Services Provided to Municipal Corporation Clarified by WB AAR Ruling

BRIEF FACTS:

The applicant, a registered proprietorship firm, was awarded a contract by the Howrah Municipal Corporation to undertake transportation of segregated solid waste from specified secondary transfer points to designated dumpsites using its own fuel-operated vehicles. The applicant was responsible for operation, maintenance of vehicles, deployment of manpower, and uploading daily work details on the municipal monitoring system, while consideration was paid based on the quantity of waste transported. In this background, the applicant approached the West Bengal Authority for Advance Ruling seeking clarity on whether the said services, being related to municipal sanitation and solid waste management functions, are eligible for GST exemption under Notification No. 12/2017.

ASSESSEE'S CONTENTION:

The assessee contended that the activity of transportation and handling of segregated solid waste is directly related to sanitation and solid waste management, which are constitutional functions entrusted to municipalities. It was argued that the service supplied is a pure service, since there is no transfer of property in goods to the municipal corporation and consideration is based only on quantity of waste transported.
Alternatively, it was submitted that even if minor consumables like fuel are involved, the supply would still qualify under Serial No. 3A. The assessee also relied on earlier advance rulings where similar garbage lifting and transportation services were held exempt from GST.

DEPARTMENT'S CONTENTION:

The Department observed that the activity performed by the assessee is related to mandatory municipal functions of solid waste management under Article 243W and is provided to a local authority (Howrah Municipal Corporation).It was further noted that the nature of work involves only transportation and handling of waste using own vehicles and does not involve supply of goods, thereby appearing to be pure service eligible for exemption under Serial No. 3 of Notification No. 12/2017.

DECISION:

The Authority observed that the applicant was providing services directly to the Howrah Municipal Corporation, which qualifies as a local authority under the GST law. It was further noted that the activity of transportation and disposal of segregated municipal waste is intrinsically connected with solid waste management and sanitation functions entrusted to municipalities under Article 243W of the Constitution (Twelfth Schedule). On examination of the contractual terms and nature of execution, the Authority found that the work did not involve any transfer of goods or execution of works contract, and therefore constituted a pure service. The Authority also clarified that Serial No. 4 of Notification No. 12/2017 was not applicable since the applicant is not a governmental authority, and Serial No. 3A was also not attracted as there was no composite supply involving goods. Accordingly, it was held that the services squarely fall under Serial No. 3 of Notification No. 12/2017 and are therefore exempt from GST.

BTA's COMMENT:

This ruling clarifies that municipal waste transportation services carried out independently using own resources, without transfer of goods, are to be treated as pure services. Where such services are intrinsically linked to constitutional municipal functions, GST exemption under Notification No. 12/2017 (Sl. No. 3) is available. The decision reinforces the legislative intent of reducing tax burden on essential public health and sanitation activities performed for local authorities.

Case Reference- Hari Narayan Singh, In re – West Bengal Authority for Advance Ruling [Order No. 34/WBAAR/2025-26 dated 27.02.2026, Case No. WBAAR 33 of 2025-26]

Author - Madhurima Bose