CBIC Clarifies Delhi Development Authority Not a local authority as per S. 2(69) of the CGST Act, 2017 [Read Circular]

The Central Board of Indirect Taxes & Customs (CBIC), through the Circular No. 245/02/2025-GST clarified that Delhi Development Authority (DDA) is not a local authority as per section 2(69) of the Central Goods and Service Tax Act (CGST), 2017. The CBIC declared that DDA does not meet the requirement of local authority as per section 2(69) of the CGST Act, 2017.

DDA has made a representation asking for clarification on whether it qualifies as a "local authority" under section 2(69) of the CGST Act of 2017. According to Sr. No. 5 of notification No. 13/2017-CTR dated June 28, 2017, services provided to a business entity by a local government are subject to reverse charge (RCM) taxation.

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A "Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund" are all considered local authorities under section 2(69) of the CGST Act, 2017.

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The phrase "local authority" refers to an organization that is tasked with overseeing and managing municipal or local funds and is comparable to an elected self-governing body like the Municipal Committee.

According to section 2(69) of the CGST Act of 2017, it is evident that DDA does not satisfy the local authority's requirements. Therefore, it is now emphasized that DDA cannot be recognized as a local government under GST law, as suggested by the 55th GST Council.

To Read the full text of the Circular CLICK HERE
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