Andhra Pradesh High Court Holds TTD Qualifies as Governmental Authority for GST Notifications; Remands Tax Rate Dispute to Assessing Authorities

In a significant decision addressing the rate of Goods and Services Tax (GST) applicable to contractors executing works for the Tirumala Tirupati Devasthanams (TTD), the Andhra Pradesh High Court has clarified the status of TTD under GST law and remanded the matter for factual determination by the Assessing Authorities.

The petitioners, contractors who undertook works for TTD between 1 July 2017 and 1 July 2022, contended that they were liable to pay GST at 12% for this period, based on specific notifications, and at 18% thereafter. The GST authorities, however, maintained that the applicable rate was 18% from 1 July 2022 onwards. The core issue before the Court was whether TTD qualifies as a ‘Governmental Authority’ or ‘Governmental Entity’ under the relevant GST notifications, thereby entitling contractors to a reduced tax rate.

The Court examined the evolution of GST notifications, particularly Notification No.11 of 2017 and subsequent amendments, which initially set the GST rate for construction and works contracts at 18% (9% CGST + 9% SGST), later reduced to 12% (6% CGST + 6% SGST) for works supplied to government bodies, subject to certain conditions. The definitions of ‘Governmental Authority’ and ‘Governmental Entity’ were analyzed in detail, focusing on criteria such as establishment by statute, government control, and the performance of functions entrusted by the government or under the Constitution.

The Court found that TTD, established under the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987, is subject to comprehensive government control. The government appoints the TTD Board, has the power to suspend or dissolve it, and oversees its major decisions. Further, by virtue of G.O.Ms.No.746 (dated 2 June 2007), the civic administration of the Tirumala Hills area is vested in the TTD Executive Officer, who exercises powers akin to those of a Gram Panchayat under the Andhra Pradesh Panchayat Raj Act, 1994. This, the Court held, satisfies the requirement that TTD performs functions entrusted to a municipality or panchayat under Articles 243W and 243G of the Constitution.

Accordingly, the Court concluded that TTD meets the definitions of both ‘Governmental Authority’ and ‘Governmental Entity’ for the purposes of the GST notifications. However, the Court emphasized that this finding is confined to the context of the notifications and should not be construed as a general declaration of TTD’s status for other legal purposes.

On the question of whether the reduced GST rate of 12% applies to the works executed by the petitioners, the Court held that this is a factual issue—specifically, whether the works fall within the categories enumerated in the relevant notifications. As such, the High Court remanded the matters to the respective Assessing Authorities to determine, after giving the petitioners an opportunity to be heard, whether the works qualify for the reduced rate.

The Court also clarified that the reduced rate notifications took effect from 13 October 2017, and the authorities’ review should be limited to the period from that date until 1 July 2022. Where contracts provide for reimbursement of the differential GST rate by TTD, petitioners may claim such reimbursement. The Court disposed of the writ petitions accordingly, setting aside assessment and appellate orders where necessary, and directed the Assessing Authorities to proceed in accordance with law.

This decision provides important clarity on the interpretation of GST notifications as they apply to statutory bodies like TTD, while underscoring the need for factual inquiry at the assessment stage regarding the nature of works executed.