P. Venugopal Naidu Vs Union of India (Andhra Pradesh High Court)
The Andhra Pradesh High Court considered multiple writ petitions involving contractors who executed works contracts for Tirumala Tirupati Devasthanams (TTD) during the period from 01.07.2017 to 01.07.2022. The dispute related to the applicable GST rate on such contracts. The petitioners contended that GST at 12% applied for the period from 01.07.2017 to 01.07.2022 and that 18% applied thereafter, whereas the GST authorities maintained that the applicable rate was 18% throughout.
The petitioners relied on Notification No.11 of 2017 dated 28.06.2017 and subsequent amendments reducing the GST rate for certain works contracts supplied to Government, local authorities, Governmental authorities, or Governmental entities. Initially, Notification No.11 of 2017 prescribed GST at 18% for construction and works contract services. Later, Notification Nos.24 of 2017 and 20 of 2017 reduced the rate from 18% to 12% for specified supplies made to Government or Governmental authorities, subject to conditions. Notification No.31 of 2017 further substituted the relevant categories with “Central Government, State Government, Union Territory, a local authority, a Governmental authority or a Governmental entity.”
The Court examined the definitions of “Governmental Authority” and “Governmental Entity.” It noted that a Governmental Authority must be a body set up by legislation or established by Government, with 90% or more Government participation or control, and carrying out functions entrusted to municipalities or panchayats under Articles 243W or 243G of the Constitution. A Governmental Entity must similarly be Government-controlled and carry out functions entrusted by the Central Government, State Government, Union Territory, or local authority.
