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Service provided by government

28 April 2020

According to sec.7(2)(b),any s service provided by government agencies shall neither be treated as goods nor services.
So , they are not taxable.
But , in s.9(3) there is a provison which says services provided by government to business entities located in taxable territory shall be taxed on reverse charge basis.
How is it possible?

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3 Replies

sanjith kotni (Articled assistant) (663 Points)
Replied 28 April 2020

Friend .
I have replied to your query here. -https://sanjithkotni.blogspot.com/.

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MARIES (GST Consultant) (219 Points)
Replied 28 April 2020

@ Harshit,

Dear Sir, each and every word in law has to be read carefully. Section 7(2)(b) does not say ANY SERVICE...but it provides "SUCH ACTIVITIES OR TRANSACTIONS UNDERTAKEN BY THE GOVT..". So far, only one activity under this section is notified i.e. the services by way of any activity in relation to a function entrusted to a Panchayat under Article 243G of the Constitution of India.

Hence, if the activity of the Government falls under article 243G, then no GST is appliable. Hence, there is no contradiction between section 7(2)(b) and section 9(3). If doubt still persists, we may discuss through whatsapp on 6380 592 749