Industrial development services for plot holders treated as taxable supply; GST exemption denied for public authority functions.

Activities undertaken by a State-controlled industrial development body for plot holders against consideration were treated as supply under section 7 of the CGST Act because they were performed in the course or furtherance of business and fell within the expanded business definition for public authorities. The claimed exemption under Notification No. 12/2017-Central Tax (Rate) was denied, as the functions were not those entrusted to a municipality under Article 243W and the services were rendered to business entities. GST therefore applied to the charges collected for those activities.

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Issues: Whether the activities carried out by the applicant to plot holders under the Gujarat Industrial Development Act, 1962 and the charges collected therefor amount to "supply" under section 7 of the Central Goods and Services Tax Act, 2017.

Analysis: The applicant's activities were examined in the context of section 7, which applies to supplies made for consideration in the course or furtherance of business, and section 2(17), which expands the meaning of business to include activities undertaken by the Central Government, State Government or local authority as public authorities. The applicant was treated as falling under the category of State Government for the purpose of the statutory scheme, and its functions were held to be public authority functions. The claimed exemption under entry 4 of Notification No. 12/2017-Central Tax (Rate) was rejected because the industrial development activities did not answer to functions entrusted to a municipality under Article 243W of the Constitution of India. The exemption under entry 6 was also found unavailable because the services were provided to business entities.

Conclusion: The activities and charges in question constitute supply under section 7 of the Central Goods and Services Tax Act, 2017 and are liable to GST.

Ratio Decidendi: Activities of a State-controlled industrial development body, when undertaken for consideration to business entities and not covered by a specific GST exemption, fall within the scope of supply under section 7 of the Central Goods and Services Tax Act, 2017.

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