Levy of GST— In the instant case, the applicant (Hyderabad metropolitan water supply and sewerage board) have paid Medical insurance premium taken to provide health Insurance to the employees, pensioners and their family members and Vehicle insurance Policy taken to provide Insurance to the vehicles owned by the Board.

In their opinion they are exempt from paying GST in view of the Entry No. 3 of the Notification Number 12/2017 - Central Tax (Rate), dt 28th June, 2017, wherein it is provided that Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution, the rate of GST is NIL. In their opinion being a governmental authority, the above entry No.3 is applicable to them.

Questions raised for advance ruling authority are as follows—

1. Does Medical insurance premium taken to provide health Insurance to the employees, pensioners and their family members, eligible for exemption as mentioned in Entry No. 3 of the Notification Number 12/2017 - Central Tax (Rate), dt 28th June, 2017.

2. Does Vehicle insurance Policy taken to provide Insurance to the vehicles owned by the Board, eligible for exemption as mentioned in Entry No. 3 of the Notification Number 12/2017 - Central Tax (Rate), dt 28th June, 2017.

There is no direct relation between the insurance services procured by the applicant and the functions discharged by them under Article 243W read with schedule 12 to the Constitution of India. Therefore these services do not qualify for exemption under Notification No. 12/2017.

Vehicle insurance policies procured by the applicant for the vehicles owned by the board qualify for exemption if they are directly used to provide services under Schedule XII of the Constitution. However if they are used for transportation of employees/board members/other persons they will not have direct relationship to functions discharged under Article 243W and therefore will not qualify for exemption under Notification No. 12/2017.

Held that— Medical insurance premium taken to provide health Insurance to the employees, pensioners and their family members, is not eligible for exemption as mentioned in Entry No. 3 of the Notification Number 12/2017 - Central Tax (Rate).

Vehicle insurance Policy taken to provide Insurance to the vehicles owned by the Board, eligible for exemption if the vehicles are directly used for to provide services under Schedule XII of the Constitution.