Notification No. 14/2017 – UTTR Explained

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Notification No. 14/2017 - Union Territory Tax (Rate): To notify the supplies which shall be treated neither as a supply of goods nor a supply of service under the UTGST Act

GST: [TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

G.S.R......(E).- In exercise of the powers conferred by clause (i) of section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), read with sub-section (2) of section 7 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council hereby notifies that the following activities or transactions undertaken by the Central Government or State Government or any local authority in which they are engaged as public authority, shall be treated neither as a supply of goods nor a supply of service, namely:-

“Services by way of any activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution.”

2. This notification shall come into force with effect from the 1^st day of July, 2017.

(Ruchi Bisht)
Under Secretary to the
Government of India

📚 Frequently Asked Questions (FAQs): Notification No. 14/2017 - Union Territory Tax (Rate)

Q1. What is Notification No. 14/2017-UTT(R)?

Answer: It is a GST notification that specifies certain government activities that are neither supplies of goods nor supplies of services.
The notification mainly covers activities relating to Panchayat functions under Article 243G.

Q2. When did the notification become effective?

Answer: It became effective on 1 July 2017.
This was the same day GST was introduced across India.

Q3. Which entities are covered?

Answer: The Central Government, State Governments, and local authorities.
The notification applies only when these bodies act as public authorities.

Q4. What does Article 243G relate to?

Answer: Article 243G deals with powers and responsibilities of Panchayats.
It enables Panchayats to perform local self-government functions.

Q5. Is GST payable on notified activities?

Answer: No.
The activities are treated as neither goods nor services, so GST does not apply.

Q6. Is "not a supply" the same as an exemption?

Answer: No.
An exempt supply remains a supply under GST law, whereas a non-supply falls outside the GST framework altogether.

Q7. Are all government services covered?

Answer: No.
Only activities relating to Panchayat functions under Article 243G are covered.

Q8. Does the notification apply to commercial government activities?

Answer: Generally no.
Commercial activities undertaken by government bodies may still attract GST depending on the circumstances.

Q9. Can local authorities rely on this notification?

Answer: Yes.
Local authorities are specifically mentioned in the notification.

Q10. Why was this notification necessary?

Answer: To prevent constitutional governance functions from being taxed under GST.
The government intended to keep public welfare activities outside the GST net.

Q11. Does the notification affect Input Tax Credit?

Answer: Indirectly, it may.
Since the activity is not treated as a supply, GST consequences must be evaluated separately under ITC provisions.

Q12. What is meant by "public authority"?

Answer: It refers to government bodies performing statutory or constitutional functions rather than commercial activities.

Conclusion

Notification No. 14/2017-UTT(R) is a foundational GST notification that ensures constitutional governance functions relating to Panchayats remain outside the GST framework. By treating such activities as neither a supply of goods nor a supply of services, the government preserved the distinction between public administration and commercial activity.

For government departments, local authorities, tax professionals, and GST practitioners, understanding this notification is essential because it demonstrates that not every activity performed by a government body automatically becomes a taxable supply.