Manpower Supply to Nagar Nigam Not Exempt Because Staff Are Called Paryavaran Mitra: AAR Uttarakhand

The Authority for Advance Ruling, Uttarakhand held that sweepers supplied under a general manpower contract to Nagar Nigam, Haridwar remain taxable at 18%, as the contract was not shown to segregate sanitation services.

The Authority for Advance Ruling, Uttarakhand has held that manpower supplied to a municipal corporation under a general outsourcing contract is a pure service, but is not exempt under Serial No. 3 of Notification No. 12/2017-Central Tax (Rate) merely because the personnel are described as sweepers or Paryavaran Mitra. [In Re: Rajeev Kumar Shukla, M/s R.K. Associates, 2026-juristway.com-3172-AAR(Uttarakhand)-GST]

Members Shri Anurag Mishra and Smt. Shriya Gupta gave the ruling on an application by a Dehradun manpower agency supplying staff to Nagar Nigam, Haridwar under a GeM contract.

The contract covered drivers, electricians, data entry operators, multi-tasking staff, gardeners and sweepers, and provided separately for GST, which had been charged at 18% since inception. By letter dated 11 Sep 2026, the Nagar Nigam asked the applicant to stop charging GST on sweepers, treating their work as sanitation functions under Article 243W on the advice of its chartered accountant.

The Authority accepted that mere supply of manpower is a pure service, but held that this alone does not confer the exemption. A local authority’s status does not exempt every service it procures, and the recipient’s view on GST, including professional advice it obtained, does not decide the question. No separate work order had been issued for Paryavaran Mitra services.

Where one contract covers several categories, its tax treatment cannot change by giving a category a different name. As the material did not show the contractual and factual segregation needed, the exemption was not established. Contract clauses and the past practice of charging GST were also held not to determine taxability.

The supply was ruled taxable at 18% (CGST 9% and SGST 9%). Any adjustment or refund of tax already charged must follow the statutory procedure, and no automatic refund arises because the recipient later takes a different view.

2026-juristway.com-3172-AAR(Uttarakhand)-GST