As per AAR, the Research and development services given by the applicant to CCRAS fall within the scope of 'supply' under section 7 of the CGST Act, 2017, and the applicant is liable to discharge GST at the applicable rates.
Nidhi | Nov 3, 2025 |
AAR: Research and Development Services for Ministry of Ayush Qualifies as ‘Supply’ under GST
The applicant, Laila Nutra Private Limited, is a private limited company that extracts the concentrate from Herbs and Other products. The applicant was selected by the Ministry of Ayush (MoA), Government of India, through its Central Nodal Agency, Central Council for Research on Ayurvedic Sciences (CCRAS) under the Scheme Ayurgyan to implement the project “Development of Drug Master File (DMF) and Technical Dossier for Single Botanicals used in Ayurved“. The applicant was selected along with four other institutes, among which only the applicant had both the extraction facility and a Research & Development (R&D) facility.
The applicant is required to procure the raw material from different sources and vendors, extract concentrates from them and distribute them to the other institutes for further Research and Development. After this, the applicant has to submit the final project documentation to the Ministry of Ayush (MoA) through CCRAS.
The applicant sought an advance ruling before the Andhra Pradesh Authority for Advance Ruling (AAR) on the following questions:
“1. Whether the Research and Development activity undertaken by the applicant for the Ministry of AYUSH (MoA), through the Central Council for Research in Ayurvedic Sciences (CCRAS), under a grant-in-aid arrangement, falls within the scope of ‘supply’ as defined under Section 7 of the CGST Act, 2017?
2. If the aforementioned Research and Development activity is considered a ‘supply’ under Section 7 of the CGST Act, 2017, whether such activity qualifies for exemption under Entry No. 3 or Entry No. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended?”
As per the Andhra Pradesh Authority for Advance Ruling (AAR), the Research and development services given by the applicant to CCRAS fall within the scope of ‘supply’ under section 7 of the CGST Act, 2017, and the applicant is liable to discharge GST at the applicable rates. Further, the authority clarified that this activity does not qualify for exemption under Entry 3 or Entry 3A of Notification No. 12 / 2017 – Central Tax (Rate) because the services are not given in the execution of functions under Articles 243G/243W.
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