Page 160 - GSTL_14th May 2020_Vol 36_Part 2

262 GST LAW TIMES [ Vol. 36
13.2 Thus, to be qualified as ‘Governmental Authority’, an authority/
board/other body must fulfill following conditions :-
(i) it should have been set up by an Act of Parliament or a State Legis-
lature or established by any Government,
(ii) with 90 per cent. or more participation by way of equity or control,
(iii) 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.
13.3 The appellant National Dairy Development Board has been set up
by an Act of Parliament, namely the ‘National Dairy Development Board Act,
1987’, therefore it satisfies the first part of the definition.
13.4 The appellant has mentioned nothing about equity participation in
the appeal memorandum. However, it has been submitted that the appellant is
totally controlled by the Central Government. As the Chairman and Directors of
NDDB are nominated by the Central Government, appointment of auditors for
NDDB is subject to approval of the Central Government, Audit Report issued by
the auditors is laid before the Parliament by the Central Government and ap-
proval of the Central Government is required for acquisition of new company
etc., as per the provisions of NDDB Act, 1987, the appellant also satisfies the con-
dition of 90 per cent. or more participation by way of equity or control.
13.5 The last part of the condition provides that such authori-
ty/board/other body should have been set up or established 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 appellant has asserted
that the Advance Ruling given by GAAR has accepted the fact that the Appellant
fulfils the criteria of carrying out any function as entrusted to a municipality un-
der Article 243W of the Constitution and the appeal is preferred in order to de-
termine requirement of fulfillment of condition of ninety per cent. or more partic-
ipation by way of equity or control. However, the fact remains that the GAAR
has clearly observed at Para 7 of the Advance Ruling as well as at the operative
part of the Advance Ruling [Para 8(i) of Advance Ruling] that the appellant
would be qualified as ‘Governmental Authority’ and exemption under Sr. 4 of
Notification No. 12/2017-Central Tax (Rate) would be available to it, if it fulfils
both the limbs of the condition below sub-clause (ii) of definition of ‘Governmen-
tal Authority. The said Paras 7 and 8 of the Advance Ruling are reproduced be-
low for ease of reference.
“7. We therefore observe that the exemption shall be available to the ap-
plicant if the applicant fulfils the common condition namely “with ninety
per cent. or more participation by way of equity or control, to carry out any
junction entrusted to a municipality under article 243W of the Constitu-
tion”. As it is not submitted by the applicant as to whether it fulfills the said
condition, if in the case of the applicant, this condition is fulfilled, then it at-
tract the benefit of the exemption, otherwise not.
8. In view of the foregoing, we rule as under
RULING
(i) National Dairy Development Board (24AADCN2029C1Z5)
would be qualified as ‘governmental authority’ from Goods
and Services Tax perspective, if it fulfils the condition namely
‘with ninety per cent. or more participation by way of equity
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