2025-VIL-1219-KAR
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SGST High Court Cases

GST – Interpretation of term ‘Government Entity’ – Petitioner is a society established by the Government of Karnataka in furtherance of the National Network Programme of Building Centres Scheme - The petitioner is exclusively engaged in civil construction works for the State and Central Governments and sought to be declared as a 'Government Entity' under the Rate Notification No.32/2017 dated 13.10.2017 issued by the State Government, which would entitle it to tax exemption under Entry No.9B of the said Notification - Whether the petitioner is a 'Government Entity' as defined under Clause (zfa) of the notification dated 13.10.2017 issued by the Government of Karnataka, and consequently, whether it is entitled to tax exemption under Entry No.9B of the said notification – HELD - A ‘Government Entity’ means an authority or a board or any other body including a society, trust, corporation, set up by an Act of Parliament or State Legislature or established by any government with 90% or more participation by way of equity or control, to carry out the functions entrusted to it by the Governments, Union Territory or a local authority - The petitioner is established and controlled wholly by the Government of Karnataka, with the Deputy Commissioner being the Chairman of the Governing Body and the other members comprising various government officials. There are judgments of the Supreme Court and the High Courts which have held that an entity completely controlled by the Government would be entitled to the exemption granted to 'Government Entities' – Further, the definition of 'Government Entity' under Clause (zfa) includes a society established by the Government with 90% or more participation by way of equity or control, which undoubtedly applies to the petitioner - Merely because other Nirmithi Kendras are paying tax, it would not mean that the petitioner would also become liable to pay tax. The impugned communication denying the petitioner the tax exemption was an error, and accordingly, quashed - The petitioner is a 'Government Entity' as defined under Clause (zfa) of the notification dated 13.10.2017 and is entitled to tax exemption under Entry No.9B of the said notification – The writ petition is allowed
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