{"id":7328,"date":"2025-12-23T17:32:45","date_gmt":"2025-12-23T12:02:45","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=7328"},"modified":"2025-12-23T17:32:45","modified_gmt":"2025-12-23T12:02:45","slug":"state-controlled-societys-services-exempt-from-gst-hc","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/state-controlled-societys-services-exempt-from-gst-hc","title":{"rendered":"State-Controlled Society\u2019s Services Exempt from GST | HC"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/gst\/101010000000413651\/services-rendered-by-state-controlled-society-against-government-grants-exempt-from-gst-hc\">Bagalkot Nirmithi Kendra vs. Union of India (2025) 37 Centax 103 (Kar.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>M. Nagaprasanna<\/strong>, J.<\/li>\n<li><strong>Shri Girish A.Yadawad<\/strong>, Advocate, for the Petitioner.<\/li>\n<li><strong>Shri M.B. Kanavi<\/strong>, CGSC, <strong>Shri Girish S. Hulmani<\/strong>, Advocate &amp; <strong>Smt. Kirtilata R. Patil<\/strong>, HCGP, for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The petitioner a society registered under the Karnataka Societies Registration Act, 1960, was constituted in 1990 pursuant to a Government Order under the Building Centres Scheme and executed civil construction works exclusively for the State and Union Governments; it functioned under State-approved rules, was governed by a body chaired by the Deputy Commissioner with senior district officers as members, and was substantially funded through State grants. For the period July 2017 to March 2018, GST authorities denied exemption under <a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%2012%2F2017-Central%20Tax%20(Rate)&amp;itemType=AP\">Notification Nos. 12\/2017-C.T. (Rate)<\/a> and <a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%20(32%2F2017)&amp;itemType=AP\">32\/2017<\/a>, contending that the petitioner did not qualify as a \u201cGovernment Entity\u201d under clause (zfa) on the ground that ex-officio government members did not constitute 90% of the governing body, and issued a communication dated 07.07.2021 demanding GST, prompting the writ petition.<\/p>\n<h2><em>High Court Held<\/em><\/h2>\n<p>The High Court held that the petitioner was established by the State Government, was under complete administrative and functional control of State-appointed officers, and was substantially funded by State grants, thereby satisfying the definition of \u201cGovernment Entity\u201d under clause (zfa) of <a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%20(32%2F2017)&amp;itemType=AP\">Notification No. 32\/2017<\/a> read with <a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%2012%2F2017-Central%20Tax%20(Rate)&amp;itemType=AP\">Notification No. 12\/2017-C.T. (Rate)<\/a>; it ruled that predominant governmental control, and not a mechanical numerical test of membership, was determinative, that tax liability could not arise merely because other Nirmithi Kendras paid GST, and accordingly quashed the impugned communication dated 07.07.2021 and held the petitioner entitled to GST exemption under Entry 9B, deciding the matter in favour of the assessee.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2023)%2011%20Centax%20180%20(S.C.)&amp;itemType=AP\">Commissioner v. Shapoorji Pallonji &amp; Co. Pvt. Ltd.<\/a> \u2014 (2023) 11 Centax 180 (S.C.) = 2023 (79) G.S.T.L. 145 (S.C.) \u2014 Followed [Paras 12, 14]<\/li>\n<li>G. Krishnegowda v. State of Karnataka \u2014 2021 SCC OnLine Kar 15332 \u2014 Followed [Paras 13, 14]<\/li>\n<li>Pio &amp; the Project Director Nirmiti Kendra v. State Information Commissioner \u2014 2025 SCC Online Kar 17662 \u2014 Followed [Paras 13, 14]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2016%20(42)%20S.T.R.%20681%20(Pat.)&amp;itemType=AP\">Shapoorji Paloonji &amp; Company Pvt. Ltd. v. Commissioner<\/a> \u2014 2016 (42) S.T.R. 681 (Pat.) \u2014 Followed [Paras 12, 14]<\/li>\n<li>V. Krishnareddy v. State \u2014 Crl. P. No. 685 of 2022, decided on 2-8-2022 by Karnataka High Court \u2014 Followed [Paras 13, 14]<\/li>\n<\/ul>\n<h2><em>List of Notifications Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%2012%2F2017-Central%20Tax%20(Rate)&amp;itemType=AP\">Notification No. 12\/2017-Central Tax (Rate)<\/a>, dated 28-6-2017 [Para 11]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%20(32%2F2017)&amp;itemType=AP\">Notification No. (32\/2017)<\/a> [No.FD 48 CSL 2017], dated 13-10-2017 [Paras 1, 4, 6, 10, 11]<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Bagalkot Nirmithi Kendra vs. Union of India (2025) 37 Centax&hellip;<\/p>\n","protected":false},"author":19,"featured_media":7343,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,60,189],"tags":[],"class_list":["post-7328","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","category-news","category-gst-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>State-Controlled Society\u2019s Services Exempt from GST | HC<\/title>\n<meta name=\"description\" content=\"HC holds that services by a State-controlled, grant-funded society qualify as services to a Government Entity; 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