As regards the notification of mega-exemption, SP, as a service provider, examined in specific entry 12 whether these works were exempt from the provisions of the Services Tax Act. As noted above, the condition is that the recipient of the service must be “government”, “local authority” or “governmental authority” to request an exemption under entry 12. It is clear that the IIT is neither a government nor a local authority, and if it is a “government agency”, PS can claim the benefit of the exemption. In reading the definition of “government agency”, SP interpreted that, although the IIT is registered under the Institutes of Technology Act 1961 and constituted by an Act of Parliament, but does not have a 90% or more interest in justice or control and no body has been formed to carry out the activities referred to in Article 243W of the Constitution, The IIT does not fall into the realm of “governmental power” and has therefore begun to collect taxes and payments on central government credit. Therefore, given the honorable Supreme Court, it is clear that the condition of 90% or more equity/control must be met for an entity/agency/body established by the government and does not apply to any corporation/agency/body established by an Act of Parliament or state legislature. That is, the department(s) interpreted the definition as follows: “government agency” means a committee, agency or other body established with 90% or more ownership by equity or control by the government and established by an Act of Parliament or a state legislature to perform a function: which has been transferred to a municipality in accordance with Article 243W of the Constitution. It is clear from the title of the article that the whole discussion is about understanding “governmental authority” before and after the judgment of the Honourable Supreme Court of Patna in Shapoorji Paloonji and Company Pvt Limited. Before we get into the discussion, let`s try to understand the meaning of the term “government agency.” Therefore, because the IIT is an Act of Parliament, it meets the definition of “governmental authority”, such that services provided by PS fall under exemption entry 12 and no service tax is payable. The Court ordered a refund of the service tax already paid by PS. It is therefore apparent from the above-mentioned judgment that the condition is linked to paragraph (ii) and not to paragraph (i). Accordingly, all services covered by Entry 12 and provided to an entity/authority constituted by an Act of the State Parliament or Legislature are not eligible for service tax and, if already paid, may be reimbursed based on the relevant judgment.

Without going into the details of the activities that are excluded at entry 12 of the mega exemption notice, we will try to understand who is a “government agency”. If the recipient qualifies as a `governmental authority` and the activities carried out by the service provider fall under heading 12, the service provider is not required to levy service tax on that activity. Therefore, it becomes necessary to understand the term “government agency” without further delay. (s) `governmental authority` means an authority, body, office or other body; However, the Honourable Supreme Court of Patna concluded that the condition of 90% or more of equity/control only applies to paragraph (ii) of the definition and not paragraph (i) of the definition. In other words, the High Court interpreted the definition as follows: The eminent lawyer representing the Commissioner of Customs, Central Excise and Services Tax stated that the SP`s objection was incorrect, as the definition of “government agency” states that the IIT must meet the requirement of 90% or more fairness/control and should be entrusted with the activities referred to in Article 243W of the Constitution. Since IIT is not an entity not entrusted with the activities referred to in Article 243w, it cannot be classified as a `governmental authority` and SP must therefore pay a service tax on that transaction. We all know that the negative list was introduced from 01.07.2012 and that after its introduction, the majority of exemptions are listed in the single notification 25/2012-ST of 1.07.2012, colloquially called “Mega Exemption Notification”.