# Exemption: Services by Government (CG/SG/UT/LA)
## Key Definitions
- Government = CG or SG working through offices/departments. Regulatory/autonomous bodies (SEBI, RBI, FSSAI, IRDA, DGCA, CCI) are NOT Government.
- Government Authority/Entity = Body in which Government has ≥ 90% participation by equity or control, and
- Set up by an Act of Parliament/State Legislature, or
- Established by any Government.
- Local Authority = Panchayat, Municipality, Zila Parishad, District Board, Cantonment Board, Regional Council, District Council, Development Board.
- Excludes local development authorities like DDA, JDA (treated as Government Authority, not Local Authority).
## Part I — Always-Exempt Government Services
1. Activities entrusted to a panchayat (Art. 243G) or municipality (Art. 243W) by a Government Authority — e.g., sanitation, gardens, statutory collections by RERA.
2. Service by Government Entity to CG/SG/UT/LA or nominated person where consideration is in the form of grants.
3. Loan guarantee by CG/SG/UT to its PSU borrowing from banks/FIs.
4. Officers deputed by Government after office hours for cargo handling of import/export (merchant overtime charges).
5. Old age homes run by CG/SG or a 12AA/AB-registered entity — for residents aged ≥60, charging up to ₹25,000/month/member.
6. Department of Posts — post card, inland letter, book post, and ordinary post weighing < 10 grams.
7. Rehabilitation professional providing therapy/counselling at medical establishments, educational institutions, or rehabilitation centres set up by CG/SG/UT or 12AA/AB trust.
8. CG/SG/UT/LA services for: registration required by law; testing/calibration/certification for safety (e.g., fire licence); issue of passport, visa, DL, birth/death certificates; tolerating non-performance of contract (fines/liquidated damages); assignment of natural resource rights to a farmer for agriculture (except rearing horses).
9. Indian Railways to individuals: platform tickets, retiring/waiting rooms, cloak rooms, battery-operated car services.
10. Inter-zonal / inter-divisional services within Ministry of Railways.
11. R&D services against grants by Government Entity or by research bodies notified u/s 35 of Income-tax Act (notification must subsist at time of supply).
12. State Government → ERCC (excess royalty collector contractor): assigning royalty collection rights from mining lease holders.
- If GST deposited by mining lease holder < exempted amount, ERCC pays the differential.
## Part II — Other Government Services (Conditional)
Three services are always Taxable, regardless of recipient:
- (a) Services by Department of Posts and Ministry of Railways (other than the carve-outs in Part I)
- (b) Transport of goods or passengers
- (c) Services to an aircraft or vessel, inside or outside the port
For all OTHER Government services:
```
Recipient is non-business person -> Exempt
Recipient is CG/SG/UT/LA -> Exempt
Recipient is business entity:
- Turnover <= threshold -> Exempt EXCEPT renting of immovable property (always taxable)
- Turnover > threshold:
- Consideration <= 5,000 (5,000/year if continuous) -> Exempt
- Consideration > 5,000 -> Taxable (under RCM)
```