Karnataka AAR: GST Not Applicable on Services Provided To Horticulture Department

The Karnataka Authority of Advance Ruling (AAR) ruled that the services provided to the Horticulture Department for the maintenance of gardens do not attract Goods and Services Tax (GST).

The applicant submitted that they are providing cleaning and sweeping of lawns & garden path areas, manpower for garden maintenance, and segregation and transport of garbage services to the State of Karnataka, i.e., the Horticulture Department.

Horticulture is the art and science of growing plants and includes soil management, landscaping, designing, construction and maintenance of gardens. The Horticulture Department has outsourced these activities to ensure that the gardens are beautiful, provide a good ambience, and provide an authentic public environment.

The applicant stated that the Department of Horticulture would fall within the definition of “government” for GST and that pure services received by it would be exempt from GST.

The AAR observed that the activities are about the function entrusted to a municipality under article 243W of the constitution. This function is covered by the 12th entry of the twelfth schedule, which says “provision of urban amenities and facilities such as gardens, parks, and playgrounds”. Hence, the AAR ruled that the applicant can claim GST exemption for the said activities.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@clear.in

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