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TMI BlogReverse charge mechanismX X X X Extracts X X X X X X X X Extracts X X X X ..... Metropolitan development authority is collecting development charges like Lay out permission charges, building permission charges, change of land use charges from the customers. The above athority is created by an act of state government and according to PAN it is a local authority. In this regard PL clarify whether the above authority is liable to pay service tax on development charges mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above and on legal services, rent a cab service, security service and works contract service under RCM. - Reply By YAGAY andSUN - The Reply = Already replied. - Reply By KASTURI SETHI - The Reply = As per title of the query, the issue pertains to ST and not GST. If you want comprehensive and correct reply, pl.let me know the period involved. Definition of Govt. etc. changed twice during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST period. - Reply By Kavali Ramanjeneyulu - The Reply = period involved is 2014-15 to 2017-18 - Reply By KASTURI SETHI - The Reply = Notification No.25/12-ST dated 20.6.12 grants exemption to construction services provided to the Govt., or local authority or Govt. Authority. This notification was amended vide Notification No.2/14-ST dated 30.1.14 by which the definition of Govt. Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was enlarged and the same is extracted below:. In the said notification, in the paragraph 2, for clause(s), the following shall be substituted, namely :- (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% or more participation by way of equi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty or control, to carry out any function entrusted to a municipality under article 243W of the Constitution ; . This amended (expanded) definition includes authority or a board or any other body established by Govt. Thus even if such board/body is not set up by an Act of Parliament or State Legislature, it will still be a Govt. Body. The condition that it should carry out the functions e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrusted to a Municipality under Article 243 W of the Constitution still remains in force. Whether MDA carries out the functions entrusted to a Municipality or not ? It has to be examined before arriving at any decision. Only PAN is not sufficient to qualify as Local Authority to claim exemption. Also see the definition of 'Local Authority' provided in the Finance Act wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is given below:- Section 65 B(31) of Finance Act, 1994 (as amended) local authority means - (a) a Panchayat as referred to in clause (d) of article 243 of the Constitution ; (b) a Municipality as referred to in clause (e) of article 243P of the Constitution ; (c) a Municipal Committee and a District Board, legally entitled to, or entrusted by the Government wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, the control or management of a municipal or local fund; (d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006 (41 of 2006); (e) a regional council or a district council constituted under the Sixth Schedule to the Constitution ; (f) a development board constituted under article 371 of the Constitution ; or (g) a regional council constituted under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article 371A of the Constitution ; In view of the above two parameters, admissibility of exemption can be explored. But, Prima facie, it appears that Metropolitan development authority is liable to pay service tax on development charges and on legal services, rent a cab service, security service and works contract service under RCM. Also go through the relevant extract of Educa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Guide (circulated by CBEC on 19.6.12 and effective from 1.7.12. 2.4.10 Would various entities like a statutory body, corporation or an authority constituted under an Act passed by the Parliament or any of the State Legislatures be Government or local authority ? A statutory body, corporation or an authority created by the Parliament or a State Legislature is neither Government no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a local authority as would be evident from the meaning of these terms explained in point nos. 2.4.7 and 2.4.8 above respectively. Such statutory body, corporation or an authority are normally created by the Parliament or a State Legislature in exercise of the powers conferred under article 53(3)(b) and article 154(2)(b) of the Constitution respectively. It is a settled position of law Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt (Agarwal v. Hindustan Steel - AIR 1970 Supreme Court 1150) that the manpower of such statutory authorities or bodies do not become officers subordinate to the President under article 53(1) of the Constitution and similarly to the Governor under article 154 (1). Such a statutory body, corporation or an authority as a juristic entity is separate from the state and cannot be regarded as Central or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Government and also do not fall in the definition of local authority . Thus regulatory bodies and other autonomous entities which attain their entity under an act would not comprise either government or local authority. - Reverse charge mechanism - Query Started By: - Kavali Ramanjeneyulu Dated:- 4-6-2020 Service Tax - Got 4 Replies - Service Tax - Discussion Forum - Knowledge Shari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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