Government Entity exemption turns on 90% government equity or control; statutory creation alone is insufficient.

Eligibility for "Government Entity" status under the exemption notification depends on both establishment by statute or government and 90% or more government participation by equity or control for carrying out an entrusted function. Mere creation under a statute is not enough. On the facts, although the applicant was constituted under the Warehousing Corporations Act, 1962, the Central Government held only 55.02% equity, and the board structure and appointment of the Managing Director did not show the required level of government control. The statutory threshold was therefore not met, and the applicant was not treated as a "Government Entity" under the notification.

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Issues: Whether the applicant qualified as a "Government Entity" under Para 2(zfa) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended by Notification No. 32/2017-Central Tax (Rate) dated 13.10.2017.

Analysis: The definition of "Government Entity" required that the body be set up by an Act of Parliament or State Legislature, or established by a Government, and that it must have 90% or more participation by way of equity or control to carry out an entrusted function. Although the applicant was established under the Warehousing Corporations Act, 1962, the material showed that the Central Government held only 55.02% equity. The composition of the Board and the manner of appointment of the Managing Director also did not establish 90% or more Government control. The statutory condition of dominant equity participation or control was therefore not satisfied.

Conclusion: The applicant was not a "Government Entity" under the said notification.

Ratio Decidendi: To qualify as a "Government Entity" under the exemption notification, the body must satisfy the statutory threshold of 90% or more Government equity participation or control; mere creation under a statute is insufficient.

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