Procurement and distribution of drugs, medicines and other surgical equipment on behalf of government exempt from GST

The Andhra Pradesh Appellate Authority of Advance Ruling(AAAR Andhra Pradesh) in the matter of M/s. Andhra Pradesh Medical Service and Infrastructure Development Corporation has rule out that Procurement and distribution of drugs, medicines and other surgical equipment on behalf of government exempt from GST.

The Question and Ruling are as follows:

1. Whether the procurement and distribution of drugs, medicines and other surgical equipment by APMSIDC on behalf of government without any value addition, and withou.t any profit or loss, without even the intent to do business in the same amounts to Supply under Section 7 of CGST/SGST Act.

2. Whether the establishment charges received from the State Government as per G.O.Rt 672 dated 20-5-1998 and G.O.Rt 1357 dated 19-10-2009 by APMSIDC is eligible for exemption as per Entry 3 or 3A of Notification 12/2017 Central Tax (Rate)?

RULING

Since the Appellant Is providing ‘service’ receiving ‘consideration’ despite not satisfying the parameter of ‘in the course or furthering of the business’ amount to Supply under Section 7 of CGST/SGST Act. However, the benefit of Notification No.12/2017-CT (Rate) Dtd. 28.06.2017 is available to this supply.

The establishment charges received from the State Government as per G.O.Rt 672 dated 20-5-1998 and G.O.Rt 1357 dated 19-10-2009 by APMSIDC are eligible for exemption as per Entry 3 of Notification 12/2017 Central Tax (Rate).

For Official Ruling Download PDF Given Below: