SUPPLY OF GOODS AND SERVICE TO PANCYAT AND GOVERNMENT DEPARTMENTS

[IRFAN KHAN]

PLEASE LET ME KNOW WHETHER SUPPLY OF GOODS AND SERVICE TO PANCHAYAT AND OTHER STATE GOVERNMENT DEPARTMENT IS EXEMPT FROM GST, IF SO PLEASE PROVIDE NOTIFICATION.WHAT IS TAXABILITY OF WORKS CONTRACT SUPPLY TO PANCHAYAT. WILL THIS ALSO BE TAXABLE UNDER GST?

PLEASE ENLIGHTEN WITH SUITABLE PROVISION OF GST LAWS

THANX AND REGARDS

[Rajagopalan Ranganathan]

Sir,

As per Sl. No. 3 of Notification No. 12/2017- Central Tax (Rate) dated 28.6.2017 as amended " Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution attracts 'Nil' rate of cgst.

As per Sl. No. 3A of Notification No. 12/2017- Central Tax (Rate) dated 28.6.2017 as amended " Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent. of the value of the said composite supply provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution attracts 'Nil' rate of cgst.

Similar exemptions are avaiable for sgst also. The above exemptions are available if the supply is intra-state.

If the supply is inter state similar exemptions are available in respect of igst vide Sl. No. 3 & 3A of Notification No. 9/2017-Integrated Tax (Rate) dated 28.6.2017 as amended.

AI Summary

GST exemption for panchayat-related services: nil tax on pure services and composite supplies with limited goods value.
Pure services provided to government entities for functions entrusted to a Panchayat or Municipality attract a nil rate of central tax; qualifying composite supplies with a limited goods component likewise attract nil rate. These exemptions apply as CGST/SGST for intra-state supplies and as IGST for inter-state supplies under the corresponding notifications, subject to the conditions on supply nature and value composition.