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August 5, 2022

GST on supply of telecommunication services to local authority is applicable

by CA Shivam Jaiswal in GST, Legal Court Judgement

GST on supply of telecommunication services to local authority is applicable

Facts and Issues of the case

The applicant M/s. Vodafone Idea Limited is engaged in providing telecommunication services and in the course of its business it is also providing these services to GHMC by way of data/voice telecommunication services SAC 9984. According to their submissions, these services provided to GHMC are not related to any specific project or specific scheme of Government and are provided to GHMC to be used by employees for general office and administrative purposes. Further their services qualify to be pure services rendered in relation to functions entrusted to a municipality under Article 243W of constitution of India. In light of the said notification the applicant finds that such services are exempt from tax under GST.

Observations by the Court

Under the Article 243W of Constitution of India, municipalities may be entrusted with the responsibilities for:

  • Preparation of plans for economic development and social justice.
  • Performance of functions and implementation of schemes in relation to matters listed in 12th schedule. Under the schedule 12 to Constitution of India, the functions and schemes are as follows
  1. Urban planning including town planning.
  2. Regulation of land-use and construction of buildings.
  3. Planning for economic and social development.
  4. Roads and bridges.
  5. Water supply for domestic, industrial and commercial purposes.
  6. Public health, sanitation conservancy and solid waste management.
  7. Fire services.
  8. Urban forestry, protection of the environment and promotion of ecological aspects.
  9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded.
  10. Slum improvement and up gradation.
  11. Urban poverty alleviation.
  12. Provision of urban amenities and facilities such as parks gardens, playgrounds.
  13. Promotion of cultural, educational and aesthetic aspects.
  14. Burials and burial grounds; cremations, cremation grounds and electric crematoriums.
  15. Cattle ponds; prevention of cruelty to animals.
  16. Vital statistics including registration of births and deaths.
  17. Public amenities including street lighting, parking lots, bus stops and public conveniences.
  18. Regulation of slaughter houses and tanneries.

Now pure services provided “in relation to any function” entrusted to a municipality under Article 243W of the Constitution of India is eligible for exemption from GST. Clearly the exemption should be directly related to the functions enumerated under Article 243W of the Constitution of India i.e., those functions listed under 12th schedule. The applicant is providing data and voice services to GHMC and to the employees of the municipalities and there is no direct relation between the services provided by the applicant and the functions discharged by the GHMC under Article 243W read with schedule 12 to the Constitution of India. Therefore these services do not qualify for exemption.



The Applicant would like to seek a ruling on whether the supply of ‘telecommunication services’ to local authority (Greater Hyderabad Municipal Corporation) by applicant is a taxable service under the CGST Act, 2017 and/or exempted.


The supply of telecommunication services to local authority is a taxable service.


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