2026-VIL-189-AAR
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SGST Advance Ruling Authority

GST - Maharashtra AAR - Taxability of supply of laboratory testing services rendered by a State agricultural university for fees - Supply in the course or furtherance of business under Section 7(1)(a) of the CGST Act, 2017 - Applicant, a statutory agricultural university substantially funded by the State Government, carried out soil, water, seed, plant pathology and feed testing and product testing for students, farmers, government departments, private companies and the public for nominal fees - Whether the laboratory testing services amount to supply for consideration in the course or furtherance of business - HELD - The definition of business under Section 2(17) is inclusive, covers any trade, commerce, profession, vocation or similar activity whether or not for pecuniary benefit, and also covers activities incidental or ancillary thereto, irrespective of volume, frequency, continuity or regularity. The services of testing and providing test reports are therefore covered by the definition of business. The fees charged are monetary consideration for the services rendered - Both the criteria of business and consideration were held to be met and the laboratory testing services held to be a supply of services under Section 7(1) – Ordered accordingly - Exemption under Entry Nos. 4 and 5 of Notification No. 12/2017-Central Tax (Rate) for services by a governmental authority in relation to functions entrusted to a Municipality or Panchayat - Applicant claimed that laboratory testing for private companies, farmers and government departments fell within agriculture including agricultural extension under the Eleventh Schedule and education under the Twelfth Schedule - Whether the laboratory testing services are in relation to functions entrusted to a Panchayat or Municipality under Article 243G or Article 243W of the Constitution - HELD - Exemption under these entries requires that the services be provided by a governmental authority and that they be in relation to a function entrusted to a Municipality or Panchayat, and both conditions must be satisfied simultaneously. Agriculture in the Eleventh Schedule covers activities related to cultivation, and laboratory testing services given to private companies or other recipients for fees are not covered by it - Agricultural extension is in the nature of training and education to farmers, and laboratory testing cannot be categorised as agricultural extension. Since the second condition is not met, it is unnecessary to examine whether the Applicant is a governmental authority - Services held not covered by Entry Nos. 4 and 5 and not exempt - Exemption under Entry 54 of Notification No. 12/2017-Central Tax (Rate) for agricultural operations and agricultural extension services and classification and rate of laboratory testing services - Applicant claimed exemption for testing directly related to production of agricultural produce and for agricultural extension services - Whether the laboratory testing services are classifiable under SAC 9986 and covered by Entry 54(a) or 54(f), and if not, the applicable classification and rate - HELD - Entry 54(a) covers services classifiable under SAC 9986 by way of agricultural operations directly related to production of agricultural produce. The firms whose products were tested are not carrying out cultivation, while testing for students and research scholars is part of academic curriculum and not directly related to production of agricultural produce - The tests of products did not lead directly to production of agricultural produce, being for commercial purposes. Agricultural extension is defined as application of scientific research and knowledge to agricultural practices through farmer education or training, and laboratory testing does not provide such education or training. The services are akin to technical testing and analysis of chemical and biological properties of materials such as soil, water and food, and are appropriately classifiable under SAC 998346, and the exemption available only to services under Heading 9986 is not available - Services held classifiable under SAC 998346 as technical testing and analysis services and liable to 18% GST - Exemption under Entry 66(a) of Notification No. 12/2017-Central Tax (Rate) for laboratory testing charges collected by a university from its students, research scholars and faculty - Applicant, a state university recognised by the University Grants Commission, conducted undergraduate, postgraduate and doctoral programmes in agriculture and related disciplines and collected laboratory testing charges from students, research scholars and faculty as part of academic curriculum and research activities - Whether the Applicant is an educational institution and whether such charges are exempt - HELD - An educational institution under the notification includes an institution providing education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force. The Applicant offers degree programmes recognised by law and is a public university with recognition, and therefore qualifies as an educational institution. Entry 66(a) exempts services provided by an educational institution to its students, faculty and staff - Laboratory testing charges collected from students, research scholars and faculty members as part of academic curriculum and research activities held exempt under Entry 66(a).
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