The applicant received a contract from Northern Railways for providing various services in relation to housekeeping, cleaning, sanitation, waste management, locomotives cleaning and washing.
The Northern Railways refused to pay GST to the applicant on the ground that such services were exempted from GST as per S. No. 3 (Pure services, excluding works contract service or other composite supplies involving supply of any goods, provided to the Government or Local Authority or a Governmental Authority by way of any activity in relation to any function entrusted to a Panchayat or municipality) of Notification No. 9/2017 – Integrated Tax (Rate). The applicant filed an application before Authority of Advance Ruling against the same.
The Authority for Advance Ruling held that such cleaning services can be considered as pure services and Northern railways is also covered in the category of Central Government. But the Railways cannot be called a Municipality under the Constitution of India. Therefore, such cleaning services by the applicant to the Northern Railways are not exempted from GST.
Citation: [2018] 93 taxmann.com 268 (AAR – New Delhi)