The Tamil Nadu Authority of Advance Ruling (AAR) ruled that GST is exempted on the supply of Dress, School Bag, Boots etc. to students without consideration to Government and Government Aided schools.
The applicant, Tamil Nadu Textbook and Educational Services Corporation is controlled by the Government of Tamil Nadu and therefore they are a government entity. They have been entrusted with the responsibility by the Government for printing and distributing textbooks to students studying in government schools and government-aided schools, besides selling textbooks at a price fixed by the government to self-financing private schools.
They are also entrusted with the responsibility of handling the procurement and distribution of free kits such as school bags, footwear, geometry box, wooden colour pencils, crayons and woollen sweaters to government and government aided schools only based on the instructions from the Education Department, Government of Tamil Nadu.
The applicant has sought advance ruling on various issues.
Firstly, whether the supply of educational aids to students such as school bags, footwear, geometry box, wooden colour pencils, crayons, woollen sweater to government and government aided schools based on the State Government educational policy for which the consideration is paid to Tamilnadu Text Book and Educational Services Corporation by the State Government by means of a budgetary allocation constitutes a supply.
Secondly, if the answer to the above is in the affirmative then is Tamil Nadu Text Book and Educational Services Corporation is entitled to avail corresponding input tax Credit on the procurement made.
The two-member bench of Ms. Manasa Gangotri Kata and Thiru Kurinji Selvaan V.S ruled that The above activities of the applicant constitutes a supply; but exempt with effect from October 13, 2017, vide entry Sl.No.150 in the Notification No. 2/2017-C.T.(Rate) dated 28th June 2017 as amended by Notification No. 35/2017-C.T. (Rate) dated 13th October 2017 and therefore the applicant is not entitled to claim credit of tax paid on the related purchases of goods and services.Subscribe Taxscan AdFree to view the Judgment