Definition of Govt. for the purpose of Service Tax - coverage of local authority/MC

[DINESH MITTAL]

Respected sir, Contractor laying out sewerage/water supply pipe lines for the local authority/MC. Service Tax Deptt. says that local developement authority or municipal corporations are not covered under Govt. for the purpose of service tax, so the contractor is laible for service tax. Now, my question is, what is the definition of Govt. for the purpose of Service Tax.

AI Summary

Scope of Government exemption may exclude municipal authorities, affecting service tax liability on works contracts.
One administrative view treats local development authorities and municipal corporations as outside the scope of Government exemption, making contractors liable to charge service tax and prompting practitioners to seek departmental confirmation and to charge service tax as a precaution; an alternative view applies the Works Contract commercial-user test, contending that works for municipal authorities are not primarily commercial and therefore not taxable.