The Authority of Advance Ruling Tamil Nadu has given the judgement about the supply of Dress, School Bag, Boots etc. to students without consideration to Government and Government Aided schools would be exempted from the GST.

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Tamil Nadu Textbook and Educational Services Corporation is the applicant, in this case, which is a society registered under the provisions of the Societies Registration Act 1860. It was set up by the Government with the object to acquire and take over the business and other activities of Government of Tamil Nadu relating to Publication of textbooks and to promote the advancement of General and Technical Education. It also had to take up the distribution activities of the textbooks to students studying in government schools and government-aided schools.

Also, they were provided 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.

Tamil Nadu Textbook and Educational Services Corporation have sought advance ruling for the following questions:

  1. Whether the supply of educational aids to students such as school bags, footwear, geometry box, wooden colour pencils, crayons, a woollen sweater to government and government-aided schools based on the State Government educational policy for which the consideration is paid to Tami Nadu Text Book and Educational Services Corporation by the State Government utilizing a budgetary allocation constitutes a supply.
  2. If the answer to the above is in the affirmative then is Tamil Nadu Text Book and Educational Services Corporation is entitled to avail of the corresponding input tax credit on the procurement made.

Ms. Manasa Gangotri Kata and Thiru Kurinji Selvaan V.S two-member bench has given the judgement that the above-mentioned activities of the applicant constitute a supply, but it is exempted 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.

With Warm Regards,

CL Bureau.

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