2022 (12) TMI 805 - AAR - GST

Governmental Authority or not - Rajasthan Housing Board - clause (zf) Paragraph 2 vide notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 - services provided by the Rajasthan Housing Board as governmental authority such as permission for building construction, approval of map, permission of additional Floor Area Ratio, leasing of land etc. are exempt as per Notification no. 12/2017 CTR dated 28.06.2017 or not. HELD THAT - The applicant The Rajasthan Housing Board (RHB) is established on 24th February, 1970 vide Rajasthan Housing Board ordinance later on notified under section 4 of the Rajasthan Housing Board Act 1970 (Act No. 4 of 1970). The RHB is constituted by the State Government and in light of section 5 of the Rajasthan Housing Board Act, 1970.The duties of Rajasthan Housing board are well defined in Sec 26 28 of Rajasthan Housing Board Act, 1970. The Applicant is involved for the framing and execution of housing Schemes subject to the control of the State Government through its Board - RHB is constituted by State Government under Rajasthan Housing Board Act 1970 (Act No. 4 of 1970) and fully controlled by state government, Thus its amply clear for us that RHB is Governmental Authority under GST Act. The said services provided by the Rajasthan Housing Board (RHB) qualifies being placed under the category of services as stipulated at sl. No. 4 under Notification No. 12/2017- (Rate).

Issues Involved:
1. Whether the Rajasthan Housing Board (RHB) is covered under the definition of "Governmental Authority" as defined in clause (zf) Paragraph 2 vide notification no. 12/2017-Central Tax (Rate) dated 28.06.2017.
2. Whether the services provided by the Rajasthan Housing Board as a governmental authority, such as permission for building construction, approval of map, permission of additional Floor Area Ratio, leasing of land, etc., are exempt as per Notification no. 12/2017 CTR dated 28.06.2017 under entry specified at S.No. 4 of said notification.

Detailed Analysis:

1. Definition of "Governmental Authority":

The Rajasthan Housing Board (RHB) was established on 24th February 1970 under the Rajasthan Housing Board Act 1970. The RHB is constituted by the State Government and operates under its control. The definition of "Governmental Authority" under clause (zf) Paragraph 2 of Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 states:

"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 any 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 or to a Panchayat under article 243G of the Constitution.

The RHB is established by the state government with 100% control of the government. It is tasked with ensuring affordable housing and urban planning, functions which are covered under Article 243W and the Twelfth Schedule of the Constitution. The Twelfth Schedule includes urban planning, regulation of land use, construction of buildings, and other municipal functions.

Conclusion on Issue 1:
The RHB qualifies as a "Governmental Authority" under the GST Act as it is established by the state government with 100% control and performs functions listed under Article 243W of the Constitution.

2. Exemption of Services Provided by RHB:

The services provided by the RHB include permission for building construction, approval of maps, permission of additional Floor Area Ratio, leasing of land, etc. These services fall under the functions listed in the Twelfth Schedule of Article 243W of the Constitution. The relevant entry in Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 states:

"Services by governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243W of the constitution."

The services provided by the RHB, such as urban planning, regulation of land use, and construction of buildings, are directly related to the functions entrusted to municipalities under Article 243W.

Conclusion on Issue 2:
The services provided by the RHB, in relation to any function entrusted to a municipality under Article 243W, are exempt from GST under entry S.No. 4 of Notification No. 12/2017-CT (Rate) dated 28.06.2017.

Ruling:

1. The Rajasthan Housing Board is covered under the definition of "Governmental Authority" as defined in clause (zf) Paragraph 2 vide notification no. 12/2017-Central Tax (Rate) dated 28.06.2017.
2. The services provided by the Rajasthan Housing Board as a governmental authority, such as permission for building construction, approval of maps, permission of additional Floor Area Ratio, leasing of land, etc., are exempt from GST under entry S.No. 4 of Notification No. 12/2017-CT (Rate) dated 28.06.2017.

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