Solid Waste Management Services To Govt-Owned Clean Kerala Exempt From GST: Kerala AAR
Pranav B Prem
The Kerala Authority for Advance Ruling has ruled that solid waste management services provided to Clean Kerala Company Limited are exempt from Goods and Services Tax (GST), holding that Clean Kerala is a government-owned entity entrusted with municipal functions under the Constitution. The ruling was delivered on an application filed by Tiffot Private Limited, which is engaged in the collection, storage, transportation, processing, bundling, and scientific disposal of non-recyclable plastic waste generated across Panchayats and Municipalities in Kerala. The services are rendered pursuant to a work agreement with Clean Kerala Company Limited, a public sector undertaking wholly owned and controlled by the Government of Kerala.
Examining the scope of work, the Authority noted that the applicant’s activities squarely fall within the definition of “solid waste management” under the Solid Waste Management Rules, 2016. The services include primary collection of non-recyclable plastic waste from designated collection points, segregation, baling, transportation in covered vehicles, and final disposal through cement kiln co-processing or other approved scientific methods, all under the supervision of Clean Kerala and in compliance with statutory norms.
The AAR then considered whether Clean Kerala qualifies as a “Governmental Authority” for the purpose of GST exemption. It observed that Clean Kerala is incorporated under the Companies Act with 100% equity held by the Government of Kerala and is entrusted with statewide solid waste management and sanitation functions. These functions, the Authority noted, are expressly enumerated under Article 243W of the Constitution and the Twelfth Schedule, which deal with municipal responsibilities such as public health, sanitation, and solid waste management.
Referring to Section 2(16) of the IGST Act and Notification No. 12/2017–Central Tax (Rate), the Authority held that Clean Kerala satisfies all statutory requirements to be classified as a Governmental Authority. Its complete government ownership, control, and discharge of constitutionally entrusted municipal functions placed it squarely within the scope of the definition under GST law
The Authority placed significant reliance on Notification No. 13/2023–Central Tax (Rate) dated 19 October 2023, which inserted Entry 3B restoring GST exemption for certain essential services provided to Governmental Authorities. Entry 3B specifically exempts services provided “by way of solid waste management” to such authorities. The AAR noted that this notification was issued to restore exemption for core municipal services that had earlier become taxable due to amendments in 2021.
After analysing the legislative framework and the nature of services rendered, the AAR concluded that the solid waste management services provided by Tiffot Private Limited to Clean Kerala Company Limited are fully covered under Entry 3B of Notification No. 13/2023–Central Tax (Rate). Consequently, the services are exempt from GST, and no tax is payable on the consideration received for such activities. In view of this finding, the Authority held that the alternative question regarding exemption under other notifications did not survive for consideration. The application was accordingly disposed of by holding that the services rendered to Clean Kerala Company Limited are not liable to GST.
Applicant Name: Tiffot Private Limited
