Contractor Providing Conservancy Services to Authority: Govt. Status and CGST Exemption Under June 2017 Notification Examined

The SC held that the question of whether a contractor providing conservancy services to a Notified Area Authority qualifies as a governmental authority exempt from CGST under the notification dated 28.06.2017 requires further consideration. The Court issued notice and directed a response within four weeks, allowing service on the State's standing counsel.

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The Supreme Court considered whether a contractor providing conservancy services to the Notified Area Authority, Vapi, is exempt from Central Goods and Services Tax (CGST) under the notification dated 28.06.2017 issued under Section 11(1) of the CGST Act, 2017. The petitioner contended that the Notified Area Authority, constituted under Section 16 of the Gujarat Industrial Development Act, 1962, qualifies as a "Governmental authority" as defined in the notification-meaning an authority "set up by an Act of the Parliament or a State legislature" or "established by any Government." Since the Authority performs functions entrusted to a Municipality under Article 243W of the Constitution, services provided to it should be exempt from CGST. Further, the petitioner argued that the Authority also qualifies as a "local authority" under Section 2(69) of the CGST Act. The petitioner challenged the High Court's reliance on a prior decision related to the Income Tax Act, asserting it was inapplicable. The Court found the issue required detailed consideration, condoned the delay, and issued notice returnable in four weeks, allowing service on the standing counsel for the State of Gujarat.

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