Government Entity classification under GST: State control, equity participation, and entrusted functions supported coverage under the rate notification.

An entity qualifies as a "Government Entity" under Notification No. 11/2017-Central Tax (Rate), as amended, where it is established by the Government, remains under Government control or has the required equity participation, and performs functions entrusted by the Government. The Uttar Pradesh AAR noted that the applicant was created under the statutory transfer scheme linked to the Electricity Act, 2003, with its Board and Chairman appointed by the State Government, and that it carried out transmission and allied power-system functions for the State. On that basis, the applicant was covered by the notification definition.

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Issues: Whether the applicant is covered under the definition of "Government Entity" under Notification No. 11/2017-Central Tax (Rate), as amended by Notification No. 31/2017-Central Tax (Rate).

Analysis: The applicant was found to have been established by the Government of Uttar Pradesh under the statutory transfer scheme relating to the Electricity Act, 2003. The Authority further held that Government control existed because the Board and Chairman were appointed by the State Government, and the entity satisfied the requirement of 90 per cent or more participation by way of equity or control. It was also found that the applicant carried out functions entrusted by the State Government, including transmission and allied power-system functions, which aligned with the definition in the relevant notification.

Conclusion: The applicant is covered under the definition of "Government Entity".

Final Conclusion: The advance ruling was answered in the applicant's favour by recognising it as a Government Entity for the purposes of the GST rate notification.

Ratio Decidendi: An entity qualifies as a Government Entity where it is established by the Government, is under Government control or has requisite Government equity participation, and carries out functions entrusted by the Government.

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