Rajasthan Advance Authority Ruling (AAR), chaired by members Umesh Kumar Garg and M.S. Kavia ruled that the Rajasthan Housing Board (RHB) covered under the Governmental authority and the services provided by the board as governmental authority is exempted from Good and Services Tax (GST).
The applicant RHB was initially notified under section 4 of the Rajasthan Housing Board Act 1970 after being constituted in 1970 under Rajasthan Housing Board ordinance. In accordance with section 5 of the Rajasthan Housing Board Act of 1970, the State Government established the RHB (RHB Act).
The applicant is directly controlled by the state government.
The counsel for applicant, CA Manish Maliwal and CA Virendra Parwal, interpreted that as RHB is a “Governmental Authority” and the services provided by them are exempted under GST.
The members noted that the RHB was established with the purpose of promoting affordable housing for the weakest segments of society and for the removal of slums, as well as to expressly carry out the obligations under Article 243W read with the 12th schedule of the Indian Constitution.
The authority observed that in the light of submissions made by applicant, it was found that the applicant asked for the advance ruling against certain services provided by the RHB such as permission for building construction, approval of map, permission of Additional floor Area Ratio, leasing of land etc,.
Furthermore, the said services provided by the applicant fall into the services enumerated under the schedule of Article 243W of the Constitution of India, thus qualified the eligibility criteria.
The Central Government, in exercise of the powers conferred by sub section (1) of Section 11 of the Central Goods and Services Tax Act, 2017 (CGST) exempted inttra-state supply of services.
It was ruled by the authority that the services provided by the RHB in relation to any function entrusted to municipality under Article 243W of the constitution is ‘Nil’ rated, thus exempted from GST.
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