GST exemption for security services denied where the recipient was a Government Entity, despite linkage to Article 243G functions.

Security services for guarding depots and offices were treated as pure services because no goods supply or works contract element was involved, but the GST exemption under entry 3 of Notification No. 12/2017-Central Tax (Rate) was unavailable because the recipient was a Government Entity and not the Central Government, State Government, Union territory or local authority. Although the services were linked to public distribution functions under Article 243G, that connection did not expand the exemption to a Government Entity. The services were therefore not exempt under the notification framework.

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Issues: Whether security services provided to the Food Corporation of India qualify as pure services supplied to a Government Entity in relation to functions entrusted under Article 243G or Article 243W of the Constitution and are exempt from GST under entry 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Analysis: Security services rendered for guarding depots and offices were treated as pure services because no supply of goods or works contract element was involved. The Food Corporation of India was held to be a Government Entity, not a Governmental Authority, since its functions were tied to procurement, storage, movement and distribution of foodgrains for the public distribution system. The entry relied upon, however, exempts pure services only when supplied to the Central Government, State Government, Union territory or local authority, and the post-amendment text does not extend that exemption to a Government Entity. Although the activity was linked to the public distribution system under Article 243G, the recipient did not fall within the specified class of recipients for the exemption.

Conclusion: The security services were pure services, but the exemption under entry 3 of Notification No. 12/2017-Central Tax (Rate) was not available because the recipient was a Government Entity and not one of the specified authorities.

Final Conclusion: The ruling answers the exemption question against the applicant and confirms taxability of the services under the notification framework.

Ratio Decidendi: Exemption under entry 3 of Notification No. 12/2017-Central Tax (Rate) applies only when the recipient is the Central Government, State Government, Union territory or local authority, and not merely because the recipient is a Government Entity performing functions linked to Article 243G or Article 243W.

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