The Rajasthan Authority for Advance Ruling (AAR) in the case of M/s Rajasthan Housing Board vide Advance Ruling No. RAJ/AAR/2022-23/20 dated 14.12.2022, has held that services provided by the Rajasthan Housing Board in relation to any function entrusted to a municipality under Article 243 W of the Constitution are exempt from GST.

In this case, the applicant is Rajasthan Housing Board (RHB), was established on February 24, 1970, by the Rajasthan Housing Board ordinance and was later notified under Section 4 of the Rajasthan Housing Board Act 1970. The RHB is constituted by the state government, and in light of Section 5 of the Rajasthan Housing Board Act, 1970, the chairman and all the members of the RHB are appointed by the state government.

The applicant has sought an advance ruling on the issue of whether the Rajasthan Housing Board is covered under the definition of “governmental authority”. Further, another issue raised was whether the services provided by the Rajasthan Housing Board as a governmental authority, such as permission for building construction, approval of a map, permission for an additional floor area ratio, leasing of land, etc., are exempt from GST. 

The Authority observes that RHB is constituted by State Government under the Rajasthan Housing Board Act, 1970 and is fully controlled by the State Government. Thus, it is clear that RHB is Governmental Authority under the GST Act.  

Further, in respect of another question as to whether the nature of service supplies being provided by the RHB falls under the 12th Schedule, Article 243W of the Constitution. The authority observed that the various services or functions of RHB, such as granting permission for building construction, approval of building map, permission for additional floor area ratio, services of leasing of land, betterment levy, etc., are covered under the functions entrusted to a municipality under Article 243W of the Constitution and therefore exempt under GST under entry 4 of the exemption notification no. 12/2017-Central Tax (Rate) dated 28.06.2017.