The Central Government, under section 7(2) of the CGST Act, exempts certain activities from being treated as supplies.
Activities related to functions entrusted to Panchayats under Article 243G of the Constitution fall under this exemption.
This exemption applies to services provided by the Central Government, State Government, or local authorities.
Effective from July 1, 2017, the exemption aims to support decentralized governance at the grassroots level.
Panchayats play a crucial role in local administration and development, and this exemption recognizes their importance.
The move aligns with the government's commitment to empowering local self-governance institutions.
It ensures that services related to Panchayat functions remain outside the purview of goods and services taxation.