GST exemption for manpower supply depends on proving the recipient is a covered government or local-body entity.

Pure manpower supply qualifies as exempt GST service under Serial No. 3 of Notification No. 12/2017-Central Tax (Rate) only if it is supplied in relation to functions entrusted to a Panchayat or Municipality and the recipient falls within a covered government, local authority, governmental authority, or government entity category. The services to Seth L.G. General Municipal Hospital were treated as relating to public health under Article 243W, but exemption was denied because no evidence established that the hospital met the required recipient classification. The notification applies only when all prescribed conditions are satisfied.

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Issues: Whether manpower supply services provided on outsource basis to Seth L.G. General Municipal Hospital are exempt from GST under Serial No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Analysis: The exemption applies only to pure services, supplied by way of activity in relation to functions entrusted to a Panchayat under Article 243G or a Municipality under Article 243W, and only where the recipient is the Central Government, State Government, Union Territory, local authority, governmental authority, or government entity. The services in question were found to be pure manpower supply, with no supply of goods involved, and were treated as relating to public health under Article 243W. However, no evidence was produced to establish that Seth L.G. General Municipal Hospital fell within the required category of recipient covered by the notification.

Conclusion: The exemption was not available to the applicant, and the answer to the question was in the negative.

Ratio Decidendi: Exemption under Serial No. 3 of Notification No. 12/2017-Central Tax (Rate) is available only when all prescribed conditions are satisfied, including proof that the recipient is a covered government or local-body category.

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