# Key Definitions under GST Exemptions for Government Services

Understanding who qualifies as 'Government' or related entities is foundational because exemptions are framed around these definitions.

## 1. Meaning of Government [Section 2(53)]

Central Government as per the Constitution.
State/UT GST Acts: Define Government as respective State/UT Government. For UTs without legislatures, the Administrator acts as Government.
Excluded: Regulatory bodies/agencies are NOT 'Government', e.g.:
CCI (Competition Commission)
Press Council of India
DGCA
Forward Market Commission
Inland Water Supply Authority of India
Central Pollution Control Board
SEBI

## 2. Local Authority [Section 2(69)]

Includes only the following:

Panchayat (Article 243(d))
Municipality (Article 243P(e))
Municipal Committee, Zilla Parishad, District Board, or any other authority legally entitled to or entrusted by CG/SG with control/management of municipal or local fund
Cantonment Board (Section 3, Cantonments Act, 2006)
Regional/District Council under Sixth Schedule
Development Board under Article 371 & 371J
Regional Council under Article 371A

Important: Local authority does NOT include bodies merely called 'local bodies' by local laws, such as Delhi Development Authority (DDA) and other developmental authorities set up by State Governments.

## 3. Governmental Authority

An authority/board/body which is:

(i) set up by an Act of Parliament or State Legislature; OR

(ii) established by any Government,

with 90% or more participation by equity/control, to carry out any function entrusted to a Municipality (Article 243W) or Panchayat (Article 243G).

## 4. Government Entity

An authority/board/body (including society, trust, corporation) which is:

(i) set up by an Act of Parliament or State Legislature; OR

(ii) established by any Government,

with 90% or more participation by equity/control, to carry out any function entrusted by CG/SG/UT or local authority.

## Key Distinction: Governmental Authority vs Government Entity

Parameter	Governmental Authority	Government Entity
Equity/Control	90% or more	90% or more
Function	Article 243W / 243G (Municipality/Panchayat)	Any function entrusted by CG/SG/UT/local authority
Forms covered	Authority/Board/Body	Authority/Board/Body including society, trust, corporation

Worked example

### Example 1

Example 1 — Identifying Government: SEBI provides certain services. Is SEBI 'Government' for GST exemption purposes?

Solution: No. SEBI is a regulatory body and explicitly excluded from the definition of 'Government'. Services by SEBI would not get the exemption available to Government.

### Example 2

Example 2 — Local Authority test: Delhi Development Authority (DDA) provides certain services. Does it qualify as a 'local authority'?

Solution: No. Even though DDA is called a local body under local laws, it is NOT included in the definition under Section 2(69). Only bodies specifically listed (Panchayat, Municipality, Cantonment Board, etc.) qualify.

### Example 3

Example 3 — Governmental Authority: An authority is set up by a State Legislature with 92% State equity, to carry out water supply (a function under Article 243W). Classify it.

Solution: It qualifies as a Governmental Authority since (a) set up by State Legislature, (b) 90%+ equity, (c) function under Article 243W.

⚠️ Common exam mistakes

Treating regulatory bodies like SEBI, CCI, or DGCA as 'Government' — they are explicitly excluded.
Treating Delhi Development Authority (DDA) as a 'local authority' — it is NOT covered under Section 2(69).
Confusing 'Governmental Authority' with 'Government Entity' — the difference lies in the function performed (Article 243W/243G vs any government-entrusted function) and inclusion of society/trust/corporation in Government Entity.
Forgetting the 90% equity/control threshold — applies to BOTH Governmental Authority and Government Entity.

Bare-Act text Section 2(53) and Section 2(69) · CGST Act, 2017 · click to expand

Section 2(53): 'Government' means the Central Government. Section 2(69): 'local authority' means - (a) a Panchayat as defined in clause (d) of article 243 of the Constitution; (b) a Municipality as defined in clause (e) of article 243P of the Constitution; (c) a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund; (d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006; (e) a Regional Council or a District Council constituted under the Sixth Schedule to the Constitution; (f) a Development Board constituted under article 371 and article 371J of the Constitution; or (g) a Regional Council constituted under article 371A of the Constitution.

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Definitions: Government, Local Authority, Governmental Authority & Government Entity

Worked example

⚠️ Common exam mistakes