Government activities subject to GST :
Section 2(17)(i) of CGST Act states that ‘business’ includes any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities.
Thus, excluding sovereign activities of State, all activities of Government is ‘business’.
Activities like Dispensing Justice, maintaining armed Forces conducting audit by C&AG, elections to Parliament or State Legislatures are ‘sovereign activities’ as no other person can do it.
In CCE v. Ank it Consultancy (2007) 8 STT 84 (CESTAT), it was held that preparation of voters list for Chief Electoral Officer is a sovereign activity of State. It is not a business activity. Hence this activity cannot be incidental or auxiliary to any ‘business activity’ – relying on Baktawar Singh Balkrishan v. UOI (1988) 2 SCC 293, where it was held that maintaining armed forces is a part of sovereign activity of State and it cannot be termed as ‘business activity’ with an eye on profit.
The decision was followed in CCE v. CS Sof tware Enterp rises (2008) 16 STT 187 (CESTAT).
The decision was followed in CCE v. CMC Ltd. (2007) 11 STT 146 = 12 VST 335 (CESTAT) in respect of activity ofpreparation ofvoter’s identity card for Election Commission.
[Really, election itselfis sovereign activity. Incidental activity like preparing voting list etc. cannot be sovereign activity]