Definition of Governmental Authority amended for exemption from Service Tax

[Bimal jain]

Dear Professional Colleague,

Definition of Governmental Authority amended for exemption from Service Tax

Notification No. 02/2014-ST dated January 30, 2014 (“the Notification”) has amended the definition of Governmental Authority as provided under clause (s) of Para 2 of the Mega Exemption Notification No. 25/2012-ST dated June 20, 2012 as under:

(s) “Governmental authority” means an authority or a board or any other body;

(i)  set up by an Act of Parliament or a State Legislature; or

(ii) established by Government, with 90 percent or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution.

Earlier, the “Governmental authority” was defined as under:

“Governmental authority’’ means a board, or an authority or any other body established with 90 percent or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W  of the Constitution.

This change is effective from 30^th January, 2014.

Point to note:

This amendment has expanded the definition of “Governmental Authority” and widens the exemption base for service tax to be provided even to an authority or a board or any other body, set up by an Act of Parliament or a State Legislature without a condition of established with 90 percent or more participation by way of equity or control by Government.

Hope the information will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us.

Thanks & Best Regards
 
Bimal Jain
FCA, FCS, LLB, B.Com (Hons)

F-30/31/32, Pankaj Grand Plaza

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Discussions to this article

[Bimal jain]

Corrigendum in Point to Note:

The Central Government vide Notification No. 02/2014-ST dated 30th January, 2014 (“the Notification”) has substituted the definition of ‘Governmental Authority’ to expand the scope of exemption to an authority or a board or any other body either set up by an Act of Parliament or a State Legislature or established by Government, with 90 percent or more participation by way of equity or control, to carry out any function entrusted to a municipality under Article 243W of the Constitution.