2026-VIL-155-AAR
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SGST Advance Ruling Authority

GST – Tamil Nadu AAR - Classification of activity of leasing of weekly market by Panchayat to tender contractors for collection of fees - functions of local authority under Article 243G - Applicant, Town Panchayat, leases right to collect fees for weekly market to tender contractors who collect entrance fees from merchants, farmers and public for usage of open space for selling fruits, vegetables, domestic animals and birds on fixed weekly market days - Consideration is determined through tender process and issuance of receipts under seal of Applicant - Whether activity of leasing of weekly market to tender contractors is activity covered under functions entrusted to Panchayat under Article 243G of Constitution as public authority and whether activity is covered under Section 7(2)(b) CGST Act, 2017 as neither supply of goods nor supply of services - HELD - The activity is covered under functions of Panchayat under Eleventh Schedule Article 243G (Markets and Fairs) - The activity is undertaken by Applicant in its capacity as public authority and is integral, incidental and ancillary to discharge of statutory functions - Engagement of tender contractors for operational convenience does not alter constitutional character or convert statutory function into independent commercial activity - The essential nexus contemplated in Section 7(2)(b) CGST Act, 2017 read with Notification 14/2017-Central Tax (Rate) dated 28.06.2017 stands established - Activity is neither supply of services nor supply of goods and falls outside ambit of GST - Ordered accordingly
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