refund

As per govt notification dated 22.8.17 govt work contract required to collect and pay gst @ 12 n 18%. Municipal corporation has given work contract of 10 lacs for road repair. Now contractor has put bill of 10lac + 12% gst. Corporation has paid it and filed return and get credit for the same, also service provide by municipal corporation is exempt. My question is that municipal corporation cailm refund of such credit ? as all services provide by municipal corporation is exempt