Governmental Authority and Government explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Neither term appears in the Act. Both live in the notifications, both require 90% Government participation, and the only thing separating them is what function the body performs — which is enough to move a body between exemption entries.
"Governmental Authority" — para 2(zf) of Notification No. 12/2017-CT(R), also inserted as an explanation to Notification No. 11/2017-CT(R) by Notification No. 31/2017-CT(R) dated 13.10.2017 — is an authority, board or other body set up by an Act of Parliament or a State Legislature, or established by any Government, with 90% or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243W or to a Panchayat under article 243G. "Government Entity" — para 2(zfa), with explanation (iv) inserted in Notification No. 10/2025-CT(R) dated 17.09.2025 — is the same, including a society, trust or corporation, but to carry out any function entrusted by the Central Government, State Government, Union territory or a local authority.
The two definitions side by side
| Governmental Authority — para 2(zf) | Government Entity — para 2(zfa) | |
|---|---|---|
| Form | an authority, a board or any other body | an authority, a board or any other body including a society, trust, corporation |
| Origin | set up by an Act of Parliament or State Legislature, or established by any Government | the same |
| Participation | 90% or more by way of equity or control | 90% or more by way of equity or control |
| Purpose | to carry out any function entrusted to a Municipality under article 243W or to a Panchayat under article 243G | to carry out a function entrusted by the Central Government, State Government, Union territory or a local authority |
Three observations follow.
The form limb is wider for a Government Entity. It expressly includes a society, trust or corporation — vehicles frequently used for special-purpose bodies and mission-mode programmes.
The purpose limb is narrower for a Governmental Authority. It must be a constitutional function listed in the Eleventh or Twelfth Schedule. A Government Entity's function need only be entrusted by a Government or local authority — anything at all, provided it was entrusted.
"Equity or control" is disjunctive. A body with no share capital can still satisfy the test through 90% control.
Why the distinction moves money
The exemption notification draws on the two terms unevenly, and that is where the classification bites:
- Entry 3 and 3A — pure services and low-goods composite supplies to Government, a State Government, a Union territory or a local authority. Exemption for supplies to a Governmental Authority or Government Entity was withdrawn by Notification No. 16/2021-CT(R) dated 18.11.2021, w.e.f. 01.01.2022. Entries 3 and 3A →
- Entry 3B — services to a Governmental Authority by way of water supply, public health, sanitation conservancy, solid waste management, and slum improvement and upgradation. This entry is available only to a Governmental Authority.
- Entries 4 and 5 — services by a Governmental Authority by way of any activity in relation to an article 243W or article 243G function.
- Entry 9C — supply of service by a Government Entity to Government, a local authority or a specified person, against consideration in the form of grants.
- Entry 44A — research and development services against grants supplied by a Government Entity, or by a research association, university, college or institution notified under section 35(1)(ii) or (iii) of the Income-tax Act, 1961 — effective 10.10.2024.
- Entry 45 — arbitral tribunal and legal services to Government, local authority, Governmental Authority or Government Entity.
- Entry 66A — affiliation services to a school established, owned or controlled by Government, a local authority, a Governmental Authority or Government Entity — exempt from 10.10.2024 by Notification No. 08/2024-CT(R) dated 08.10.2024.
So a body classified as a Governmental Authority gets entry 3B on its inputs; a Government Entity does not. A body classified as a Government Entity can supply services against grants under entry 9C; a Governmental Authority is not named there.
Two clarifications that show the test working
District Mineral Foundation Trusts are Governmental Authorities. The question was whether DMFTs set up by State Governments qualify. Circular No. 206/18/2023-GST dated 31.10.2023 reasoned that DMFTs "work for the interest and benefit of persons and areas affected by mining related operations by regulating receipt and expenditure from the respective Mineral Development Funds", providing services related to drinking water supply, environment protection, health care facilities, education, welfare of women and children, supply of medical equipment. "These activities are similar to activities that are enlisted in Eleventh Schedule and Twelfth Schedule." The ultimate users are individuals, families, women and children, farmers and SHGs of the mining-affected areas, and "the services/supplies out of DMF fund are provided free of charge and no consideration is realized." Accordingly, DMFTs are Governmental Authorities, eligible for the same exemptions as any other.
RERA is a Governmental Authority. Circular No. 228/22/2024-GST dated 15.07.2024 clarified that RERA is constituted under the Real Estate (Regulation and Development) Act, 2016 and "performs function of regulating the real estate development and construction of the building entrusted to them which fall under Entry No. 1 and 2 of the Twelfth Schedule" — urban planning including town planning, and regulation of land-use and construction of buildings.
And the consequence for RERA's own receipts: "statutory collections made by RERA are covered under the entry no. 4 and hence exempted from GST."
The method in both circulars is identical. Identify what the body actually does, map it onto the Eleventh or Twelfth Schedule, and the classification follows. That is the test to apply to any new body.
What these definitions do not do
They do not make a body "Government". A Governmental Authority or Government Entity remains a separate juridical person. It is not within section 2(53), it is not a local authority under section 2(69), and it does not automatically enjoy exemptions drafted for Government. What "Government" means →
They do not decide TDS. The section 51 deductor list notified by Notification No. 50/2018-Central Tax uses a 51% threshold — "an authority or a board or any other body set up by an Act of Parliament or a State Legislature or established by any Government, with 51% or more participation by way of equity or control, to carry out any function" — not the 90% test. Circular No. 76/50/2018-GST confirms that the 51% line applies to both limbs of that clause. A body may therefore be a TDS deductor at 51% and yet fail the 90% test for the exemption entries. Who must deduct TDS →
And note the 2025 restatement. The Handbook records that explanation (iv) was inserted in Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025, explaining the term "Government Entity" — carrying the definition into the superseding goods exemption notification.
Key takeaways
- Both terms live in Notification No. 12/2017-CT(R) — paras 2(zf) and 2(zfa) — and were inserted into the rate notification by Notification No. 31/2017-CT(R).
- Both require 90% or more participation by way of equity or control — disjunctive.
- Governmental Authority = a body carrying out a 243G or 243W function; Government Entity = a body carrying out any function entrusted by Government or a local authority.
- The Government Entity form limb expressly includes a society, trust or corporation.
- Entry 3B is only for a Governmental Authority; entries 9C and 44A name a Government Entity.
- Exemption under entries 3 and 3A for supplies to either was withdrawn w.e.f. 01.01.2022.
- DMFTs (Circular No. 206/18/2023) and RERA (Circular No. 228/22/2024) are Governmental Authorities.
- The TDS deductor test is 51%, not 90% — the two must not be read across.
Read next
- What Is "Government" Under GST — and What Is Not
- Entries 3 and 3A: Pure Services and the 25% Rule
- Section 51: Who Must Deduct TDS, and the ₹2.5 Lakh Threshold
Disclaimer: Positions stated as on 5 September 2026, based on paras 2(zf) and 2(zfa) of Notification No. 12/2017-Central Tax (Rate), Notification Nos. 31/2017, 16/2021, 08/2024 and 10/2025-Central Tax (Rate), Notification No. 50/2018-Central Tax, and Circulars No. 76/50/2018-GST, 206/18/2023-GST and 228/22/2024-GST, as reproduced in the ICAI Handbook on Government Supplies under GST (Including TDS Provisions), updated to 15 April 2026.