Order Date – 01 April 2022

Facts – 

• The Applicant, M/s Garhwal Mandal Vikas Nigam Limited, an undertaking of Government of Uttarakhand submitted that they are receiving consideration for implementation of various projects from Government Departments in the form of Grants and the said grants are utilized by way of procurement of services/goods from contractors for executing those projects. 

Issues –

• Whether the activities undertaken for implementing various projects for Governmental/ Governmental Authority the consideration for which is received in the form of grants amounts to supply? 
• Whether supply of service to the said Government/ Governmental Authorities for which the consideration is received in the form of Grants is exempt?

Order – 

• The authorities held that that according to section 7 of the CGST Act, 2017 any activity undertaken by one person to another for a consideration amounts to supply, hence, we hold that money transferred by the Government into the accounts of the applicant in the form of grant is a "consideration" and the activity undertaken by the applicant for the State/Central Government amounts to supply. 
• For the second issue, it was observed that by virtue of Notification No. 12/2017-CT (Rate) dated 28.06.2017 any supply of services by Government/ local authority etc. is exempt from payment of GST, if the consideration received from Central Government, State Government, Union Territory or local authority, is in the form of grants. 
• In the instant case it was observed that the letter of the Secretary, Uttarakhand Government the word 'Anudaan' and the letter dated 16.09.202, Department of Empowerment of Persons with Disabilities (Divyangjan), Ministry of Social Justice and Empowerment, GOI, specifies that 'Purpose for which this grant is sanctioned – 

            “creation of barrier free environment for PwDs 44 No. in Tourist Rest House in 07 Districts of Uttarakhand State under administrative charge of GMVNL,                      Dehradun under the SIPDA scheme during 2020-21", 

               establish that the consideration is in the form of grants and hence, we hold that the benefit of exemption Notification is available to the applicant in                          respect of these two works.

• Accordingly, it was held that exemption from payment of GST is available for the project work.