Local authority status under GST: statutory development body with municipal functions and local fund qualifies for exemption.

An authority created by statute and performing civic and development functions may qualify as a local authority under section 2(69)(c) of the GST Act where it is legally entrusted with control or management of a local fund and remains under substantial Government supervision. The West Bengal AAR found that the development authority satisfied these conditions because it carried out municipal-type functions under State control and its Development Fund answered the description of a local fund. On that basis, the authority fell within the expression "other authority" in section 2(69)(c) and its services were eligible for exemption under Notification No. 12/2017-Central Tax (Rate) and the corresponding State notification.

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Issues: Whether the applicant is a local authority within section 2(69)(c) of the GST Act and, if so, whether the services supplied by it are entitled to exemption under Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 and the corresponding State notification.

Analysis: Section 2(69)(c) covers an authority other than a Municipal Committee, Zilla Parishad or District Board if it is legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund. The applicant was shown to be a statutory authority created under the New Town Kolkata Development Authority Act, 2007, performing civic and development functions of the kind listed in Article 243W and the Twelfth Schedule. The provisions of that Act placed the authority under significant State control, including appointment of members, control over posts, salaries, accounts, audits, directions and supervisory powers. Its Development Fund also answered the description of a local fund, and the authority was shown to be permitted to operate such fund.

Conclusion: The applicant is a local authority within section 2(69)(c) of the GST Act and is entitled to the exemptions available under the exemption notification on the services it supplies.

Ratio Decidendi: An authority discharging municipal functions and legally entrusted with a local fund, under substantial Government control, falls within the expression "other authority" in section 2(69)(c) of the GST Act and is eligible for the corresponding exemption as a local authority.

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