The Gujarat Authority of Advance Ruling (AAR) held that Gujarat State Road Development Corporation exempted from GST as it is a Government Entity for construction of roads, sideways, paths falling under jurisdiction of Municipality, Panchayat.
The applicant, M/s. Gujarat State Road Development Corporation has submitted that the Govt. of Gujarat in order to have a developed, efficient and high quality system of road transportation, had formulated a Road Policy in December 1996 (Policy), to be implemented by the Roads and Building Department, GOG. The policy enables private participation in the development, construction, repair, up gradation, management, operation and maintenance of roads within the State of Gujarat.
The applicant has sought the advance ruling on the issue whether the service of construction and development of state highway roads provided by GSRDC would qualify as an activity in relation to function entrusted to Panchayat or Municipality under Article 243G or 243 W respectively, of the constitution of India and whether applicant would fall under the definition of Governmental authority or Government Entity.
The coram of Arun Saxena and Arun Richard ruled that GSRDC is a Government Entity. In addition to being a Government Entity, GSRDC shall also be a Government Authority, in such cases when it constructs i. Municipal Roads/ bridges; Village Roads/bridges.
The AAR noted that it constructs roads, sideways, paths on the land which falls under the jurisdiction of Municipality and Panchayat. We note that roads and bridges are activities entrusted to a municipality under Article 243W of our Constitution and to a Panchayat under Article 243G of our Constitution. Therefore in such specific cases where GSRDC constructs municipal roads/bridges or village roads/bridges, it satisfies the definition of Government Authority.
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