The Prime Minister, Mr. Narendra Modi officially launched one of the biggest ever cleanliness drives in India by way of ‘Swachh Bharat Abhiyan’ on 2 October 2014. It is a national level campaign introduced by the Government of India to clean the streets, cities and infrastructure of the country. In addition to the active participation of the Prime Minister himself, he has nominated various dignitaries in diverse fields such as; Sachin Tendulkar, Anil Ambani, Salman Khan and Priyanka Chopra among others to propagate this campaign. This campaign aims to accomplish the vision of 'Clean India' by 2 October 2019, which marks the hundred and fiftieth birth anniversary of Mahatma Gandhi.
Sweeping of streets and proper disposal of waste into dustbins or trash cans is just one of the primary steps towards the vision of ‘Clean India’. However, proper treatment of such waste i.e. waste management, is one of the functions which is expected to play a pivotal role in maintaining cleanliness. ‘Waste management’ can be described as the generation, prevention, characterisation, monitoring, treatment, handling, reuse and residual disposition of solid wastes. In India, waste management continues to be inadequate, despite long-standing efforts by the government. Over spilled trash cans and heaps of garbage at public places is a common sight. Lack of adequate waste management could lead to overflow of sewage/waste in open drains and blockage of drainage systems. Inefficient waste management could have negative impacts on the health and environment at large. Further, considering the population of India, effective waste management is one of the prime requirements due to the ever increasing population. Hence, implementation of a robust waste management system can be a significant step towards achievement of the vision ‘Clean India’, in the true sense.
The Indian Government has frequently, and at various levels through numerous initiatives, propagated the importance of solid waste management. One of the initiatives undertaken by the government to encourage the activity of solid waste management in India was to grant a service tax exemption to services provided to the government or a governmental authority by way of solid waste management. However, such exemption is available only when solid waste management services are provided directly to the government or a governmental authority by a principal contractor. The process of waste management includes various activities such as; collection of solid waste, segregation, transportation, disposal, etc. These activities are generally sub-contracted by the principal contractors to sub-contractors. Since, the service tax exemption is only available to the principal contractors who provide solid waste management services to government or a governmental authority, the sub-contractors are bound to charge service tax on the services provided by them.
Further, in absence of output service tax liability, the principal contractor has to bear the cost of service tax charged by the sub-contractors. Hence, the service tax exemption benefit granted to principal contractors is reduced to a mere theoretical ineffective exemption which in essence is increasing the cost of the entire activity.
It is pertinent to note that specific exemption is granted in respect of works contract services provided by a sub-contractor to the contractor providing work contract services which are exempted from the levy of service tax. Thus, in case of works contract, the entire chain of activities is given the benefit of exemption. Therefore, drawing analogy from the same, since solid waste management services provided by a contractor to the government or a governmental authority are exempt from service tax, the sub-contractors providing services of or in relation to solid waste management to another contractor providing services of solid waste management which are exempt, could also be granted the benefit of service tax exemption.
Hence, despite the innumerous initiatives of the government for promoting cleanliness, sanitation and waste management in India, there is yet a substantial amount of effort which needs to be put in by the government as well as the general public to achieve the collective milestone of ‘Clean India’ by 2019.
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