Property Tax Survey Services for Municipalities Not Exempt from GST: Maharashtra AAR

In re Sthapatya Consultants (India) Private Limited (GST AAR Maharashtra)

Maharashtra Authority for Advance Rulings (AAR) has held that services provided to municipal councils for the purpose of property tax assessment are not exempt from Goods and Services Tax (GST). In its ruling dated April 29, 2025, the authority determined that while these are pure services provided to a local authority, they do not fall under the specific functions entrusted to a municipality under Article 243W of the Constitution, which is a mandatory condition for availing the exemption.

The applicant, Sthapatya Consultants (India) Private Limited, had sought a ruling on whether its services to various municipal councils, including Chalisgaon, Akluj, Pandharpur, and Wai, were exempt from GST under Entry 3 of Notification No. 12/2017-Central Tax (Rate).

Background and Nature of Services

Sthapatya Consultants was engaged by these municipal councils to provide a range of services aimed at streamlining property tax administration. An examination of the work orders and agreements revealed that the core activities included:

• Door-to-door property numbering and surveys.
• Preparing computerized property plans and photographs.
• Collecting all necessary information for the assessment of property tax and other allied taxes.
• Using modern methods, including drone/satellite imagery, to create a comprehensive property database.
• Assisting the councils in implementing the property tax assessment and processing assessment lists.

The agreements explicitly stated that the purpose of the contract was “assisting Municipal Council for…assessment of property tax” and that Sthapatya Consultants would work under the supervision and control of the council.

The Legal Question and Exemption Criteria

The central issue was whether these services qualified for exemption under Entry 3 of Notification No. 12/2017. For a service to be exempt under this entry, it must satisfy three cumulative conditions:

1. It must be a pure service, not involving the supply of any goods.
2. It must be provided to a Central Government, State Government, Union territory, or a Local Authority.
3. The service must be an activity in relation to a function entrusted to a Municipality under Article 243W of the Constitution.

The AAR found that the first two conditions were comfortably met. The services provided by Sthapatya were purely in the nature of consultancy and data processing, with no transfer of goods, thus qualifying as a “pure service.” Furthermore, the recipients of these services, the Municipal Councils, are unequivocally “Local Authorities.”