GST exemption for pure consultancy linked to municipal functions applied to amounts received as reimbursement from a Government Entity.

Amounts described as reimbursement were treated as consideration for pure consultancy services supplied to a Government Entity. Because the services related to functions entrusted to a Municipality under Article 243W, the supply fell within Serial No. 3 of Notification No. 12/2017-Central Tax (Rate), which exempts pure services provided to a Government Entity for municipal or panchayat functions. GST was therefore not payable on the amounts received for the covered services.

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Issues: Whether GST is leviable on amounts received as reimbursement of expenses from MMRDA for consultancy services and related support activities.

Analysis: The ruling held that the amounts received from MMRDA, though described as reimbursement, were in substance consideration for pure consultancy services supplied by the applicant. MMRDA was treated as a Government Entity, and the applicant's services were found to be in relation to functions entrusted to a Municipality under Article 243W of the Constitution. On that basis, the supply fell within Serial No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, which exempts pure services provided to a Government Entity by way of any activity in relation to municipal or panchayat functions.

Conclusion: GST was not payable on the amounts received from MMRDA for the services covered by the ruling.

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