Notification No. 02/2014-ST dated January 30, 2014 (“the Notification”) has amended the definition of Governmental Authority as provided under clause (s) of Para 2 of the Mega Exemption


Notification No.25/2012-ST dated June 20, 2012 as under:

(s) “Governmental authority” means an authority or a board or any other body;
(i) set up by an Act of Parliament or a State Legislature; or

(ii) 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.


Earlier, the “Governmental authority” was defined as under:

“Governmental authority’’ means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W of the Constitution.

This change is effective from 30th January, 2014.


Point to note:

This amendment has expanded the definition of “Governmental Authority” and widens the exemption base for service tax to be provided even to an authority or a board or any other body, set up by an Act of Parliament or a State Legislature without a condition of established with 90% or more participation by way of equity or control by Government.