2026-VIL-09-AAAR
  1. Home
  2. 2026-VIL-09-AAAR

SGST AAAR

GST – Andhra Pradesh AAAR - Consideration versus Subsidy/Grant - The appellant received grant-in-aid from the Central Council for Research in Ayurvedic Sciences (CCRAS) to undertake Research & Development activities under the Ayurgyan Scheme – Vide the impugned order the AAR held that the R&D activities undertaken by the appellant under a grant-in-aid arrangement are taxable under the CGST Act, 2017 and are not eligible for exemption under Notification No. 12/2017-Central Tax (Rate) - Whether the grant received by the appellant constitutes "consideration" under Section 2(31) of the CGST Act or is a "subsidy" excluded from the definition – HELD - The amounts received by the appellant from the Central Council for Research in Ayurvedic Sciences under the AYURGYAN Scheme are consideration within the meaning of Section 2(31) of the CGST Act, 2017, being payments made in respect of identifiable supplies of goods and services undertaken by the appellant pursuant to defined project obligations. The appellant and CCRAS are distinct taxable persons, and the activities carried out by the appellant constitute supplies made in the course or furtherance of business under Section 7 of the CGST Act - The research and development activities undertaken by the appellant are correctly classifiable under Heading 9981, and the manufacture and supply of extracts constitute taxable supplies of goods - The appellant's research and development activities constitute taxable supply under the CGST Act, 2017, and the appellant is not eligible for exemption under Entry 3 or 3A of Notification No. 12/2017-CT (Rate) or Notification No. 8/2024-CT (Rate) - The appeal is dismissed - Supply Between Distinct Persons - The appellant was appointed as a Sub-Nodal Agency by CCRAS to carry out the research activities. The appellant contended that this was an "intra-departmental" arrangement without a supply between distinct persons. However, the appellant is a separate legal entity from CCRAS with its own registration, accounts, and statutory existence. The fact that the appellant followed government guidelines like PFMS and GFR does not negate its independent legal personality. The activities were undertaken pursuant to approved proposals with defined deliverables, establishing a clear functional nexus akin to a contractual arrangement, satisfying the requirements of "supply" under Section 7 - Exemption under Entry 3 and 3A of Notification No. 12/2017 - The appellant claimed exemption under Entry 3 or 3A of Notification No. 12/2017-CT (Rate), which exempt services provided to local authorities "in relation to any function entrusted" to them under Articles 243G and 243W. The services were not provided to a Panchayat or Municipality, nor were they directly in relation to the functions entrusted to such local bodies. The appellant's activities were undertaken for and on behalf of the central autonomous body CCRAS, not under any decentralized governance framework. Merely aligning the activities with a subject like "public health" in the Twelfth Schedule is not sufficient to avail the exemption.
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

Analysis of Union Budget 2026-27:
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?