Security & Scavenging Services to Government Hospitals Are “Pure Services”, Exempt from GST: West Bengal AAR
Pranav B Prem
The West Bengal Authority for Advance Ruling (AAR) has held that security and scavenging services provided to government-run medical colleges and hospitals qualify as “pure services” and are exempt from Goods and Services Tax (GST) under Entry 3 of Notification No. 12/2017–Central Tax (Rate). The Authority ruled that such services are essential to public health functions entrusted to Panchayats and Municipalities under Articles 243G and 243W of the Constitution.
The ruling was delivered in an application filed by Ex Servicemen Resettlement Society, which provides security personnel and scavenging staff on a contractual basis to various State Government medical colleges, district hospitals and sub-divisional hospitals in West Bengal. The applicant submitted that it raises monthly invoices comprising only wages, employer’s contribution towards EPF and ESIC, and annual bonus, without supplying any goods along with the services.
The applicant sought a ruling on whether the services provided by it were exempt from GST as “pure services” under Entry 3 of Notification No. 12/2017. It was contended that the services were supplied exclusively to State Government hospitals and were directly connected with public health and sanitation functions, which are constitutional responsibilities of local authorities.
The Authority examined the scope of the expression “pure services” and noted that although the term is not defined under the GST law, Entry 3 of Notification No. 12/2017 excludes works contracts and composite supplies involving the supply of goods. On perusal of the invoices placed on record, the Authority observed that the bills were restricted only to labour-related components such as wages, statutory contributions and bonus, and did not involve any supply of goods.
The Authority further examined whether the services were provided in relation to functions entrusted to Panchayats and Municipalities. Referring to the Eleventh Schedule under Article 243G and the Twelfth Schedule under Article 243W of the Constitution, the Authority noted that public health, sanitation, conservancy and hospital services are expressly listed as constitutional functions. It observed that hospitals cannot function effectively without security and scavenging services, which are indispensable support services for maintaining hygiene, safety and public health infrastructure.
The Authority emphasised that the phrase “any activity in relation to” used in the exemption notification has a wide ambit. It held that activities which are integrally connected to and enable the effective delivery of public health services clearly fall within the scope of the exemption, even if they are not core medical services by themselves.
After examining all three conditions prescribed under Entry 3 of Notification No. 12/2017—namely that the service must be a pure service, it must be provided to the government or local authority, and it must be in relation to constitutional functions—the Authority concluded that all conditions stood satisfied in the present case. Accordingly, the West Bengal AAR ruled that security and scavenging services provided by the applicant to government medical colleges and hospitals qualify as “pure services” and are exempt from GST under Notification No. 12/2017–Central Tax (Rate).
Appearance
For Applicant: Mr. Sunirmal Basu, Vice president of applicant
Cause Title: Ex Servicemen Resettlement Society
Case No: WBAAR 22 of 2025-26
