Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Friday, February 7, 2014

Change in Definition of 'Governmental Authority' in Service Tax Mega Exemption

Central Government  has substituted the definition of ‘governmental authority’ ( Notification No. 02/2014-ST dated 30.01.14. Now the  “governmental authority” means an authority or a board or any other body -  set up by an Act of Parliament or a State Legislature Or established by Government with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution.
Now after this amendment organizations fall under the definition of ‘governmental authority’ even if these are not set up by an Act of the Parliament or a State Legislature.
With effect from 30th January, 2014 following exemptions are available to these organizations:-

A)Services provided by governmental authority(Refer Sr. No. 39 of Mega Exemption)
Services by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution are exempt.

B)Services received by governmental authority(Refer Sr. No. 25 & 34 of Mega Exemption)

a)Specified services as listed in Sr. No. 12 of Mega Exemption relating to construction, erection, 
commissioning, installation, repair etc.

b)Services in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement and upgradation; or repair or maintenance of vessel.  

c)Services received from a service provider located in a non- taxable territory by such authorities in relation to any purpose other than commerce, industry or any other business or profession. 

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