Governmental Authorities Not ‘Business Entities’: CESTAT Rules HIMUDA Not Liable under RCM for Legal Services [Read Order]

CESTAT held that HIMUDA, a statutory authority, is not a “business entity” and hence not liable under the Reverse Charge Mechanism for legal services. The Tribunal interpreted the Finance Act and GST framework to clarify that government authorities performing statutory functions cannot be treated as commercial service recipients. It relied on prior rulings distinguishing sovereign activities from business operations. The judgment clarifies the limited scope of RCM on legal services and exempts government authorities engaged in non-commercial statutory duties.