2024-VIL-123-AAR
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SGST Advance Ruling Authority

GST – Tamil Nadu AAR - Section 2(31) & 7(1) of the CGST Act, 2017 - Taxability to grant received by the applicant in convertible Foreign Exchange from an overseas Non-Profit Organisation (Food & Agriculture Organisation of United Nation) - Whether the grant from the Food and Agriculture Organisation of UN is a supply in accordance with the provisions of the GST Act – HELD - The incidence to pay tax on goods or services or both arise at the time of supply and ‘supply is the taxable event as far as GST law is concerned. For levying GST on a particular transaction, it has to first fall under the scope of ‘Supply’ defined under Section 7(1) of the CGST Act, 2017 - in the transaction between the applicant and the FAO of UN, nothing will be supplied to the FAO of UN for the grant given by them. It is purely a gratuitous grant from the overseas UN linked autonomous and Non-Profit Organisation for the use of the applicant - there is no supply of goods or services to the grant providing organization, and hence the activities undertaken by the applicant in lieu of receipt of the grant from FAO is not covered under the meaning of ‘scope of supply’ – Further, the term ‘consideration’ refers to payment made towards supply of goods or services or both. However in the instant case, there is no supply of goods or services or both involved in the transaction between the applicant and the FAO, therefore, the amount received by the applicant cannot be held as consideration – Accordingly, neither the grant received by the applicant can be construed to be consideration under the provisions of the GST law nor the activities to be undertaken by the applicant, as per the work plan developed and agreed upon jointly by the FAO and the applicant qualify to be supply under the provisions of GST law – Ordered accordingly
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