GST
TRT-2025-
AAR Andhra Pradesh
Date:-30-05-22
In:-
Issue Favourable to Tax Payer ?:- 0
Order Date – 30 May 2022
Facts –
- The applicant, M/s. Andhra Pradesh Medical Services and Infrastructure Development Corporation, established to discharge functions of public health and the Government of Andhra Pradesh holds 100% of the equity and control.
- The applicant submits that all services provided by the corporation are in relation to public health enumerated under entry No. 26 of the eleventh schedule of the Constitution.
- The applicant has approached the Authority for Advance Ruling to get a clarification on the taxability of incomes received.
Issue –
- Whether procurement and distribution of drugs, medicines and other surgical equipment by APMSIDC without any value addition and without any profit or loss amounts to Supply u/s 7 of CGST/SGST Act and whether is eligible for exemption as per Entry 3 or 3A of Notification 12/2017 Central Tax (Rate)?
Order –
- The authorities observed that that payment is made and the invoices are raised in the name of MD, APMSIDC. Therefore, the procurement and distribution of drugs, medicines and other surgical equipment by APMSIDC, is essentially a 'supply', as per the provisions of the Act.
- They further observe that the applicant undertakes the procurement of drugs, surgical equipment, etc, and raises an invoice in the name of MD, APMSIDC. By all means, the principal activity is the procurement of goods and the ancillary activity is the service component of handling and monitoring of the supply. Thus, there is a clear cut involvement of both goods and services in the instant transaction and it is not in any way, a pure service, thus not eligible for exemption.
- The authorities held that the CBIC amended Notification No, 16/2021-central Tax (Rate) dated November 18, 2021 according to that Serial No. 3 and 3A services provided to Governmental authority and Government Entity shall no longer be exempt from January 1, 2022 and shall attract GST as applicable under Services Rate Notification, and therefore not eligible for exemption.
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