Classification of service— The present appeal has been filed against the Advance Ruling issued by Authority for Advance Ruling, Andhra Pradesh.

APMSIDC had preferred an Advance ruling on the following questions.

a. Whether the procurement and distribution of drugs, medicines and other surgical equipment by APMSIDC on behalf of government without any value addition, and without any profit or loss, without even the intent to do any business amounts to supply under section 7 of CGST/SGST Act.

b. Whether the establishment charges received from State Government as per G.O. RT 672 dated 20-05-1998 and G.O. RT 1357 dated 19-10-2009 by APMSIDC is eligible for exemption as per Entry 3 or3A of Notification 12/2017 Central Tax (rate)?

The AAR, Andhra Pradesh had pronounced a ruling that the transaction under question 1 is supply and that the establishment charges based on the reasoning that these are ancillary to the principal supply they are also included in the supply as held above. Thus, in effect the ruling on second question is predominantly depended on the rationale and ruling of question 1. It appears that the Advance ruling authority had not considered the facts of the case and the ruling was hance not just and fair.

Aggrieved by the same the present appeal is now being preferred before the Appellate authority for advance Ruling.

Held that— Since the Appellant is providing 'service' receiving 'consideration' despite not satisfying the parameter of 'in the course or furthering of the business' amount to Supply under Section 7 of CGST/SGST Act. However, the benefit of Notification No.12/2017-CT (Rate) Dtd. 28.06.2017 is available to this supply.

The establishment charges received from the State Government as per G.O.Rt 672 dated 20-5-1998 and G.O.Rt 1357 dated 19-10-2009 by APMSIDC are eligible for exemption as per Entry 3 of Notification 12/2017 Central Tax (Rate).