In Re: M/s. The Akshaya Patra Foundation
GST
2019 (2) TMI 832 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – 2020 (32) G. S. T. L. 407 (A. A. R. – GST – Raj.)
AUTHORITY FOR ADVANCE RULING, RAJASTHAN – AAR
Dated:- 9-1-2019
ARN No. RAJ/AAR/2018-19/28
GST
J.P. MEENA AND HEMANT JAIN MEMBER
Present for the applicant: Shri Virendra Parwal (Authorised representative) and Shri K.R. Shreedhar (GM, Finance, TAPE)
Note: Under Section 100 of the CGST/RGST Act 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act 2017, within a period of 30 days from the date of service of this order.
The Issue raised by M/s. The Akshaya Patra Foundation situated at Mahal Scheme, C-6 to C-11, Goner Road, Jagatpura, Jaipur 302017, Rajasthan {hereinafter the applicant} is fit to pronounce advance ruling as it falls under ambit of the Section 97 (2) (g) and it is given as under:
whether any particular thing done b
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c. Mid-Day Meal Scheme: The applicant strives to eliminate classroom hunger by implementing the Mid-Day Meal Scheme in the government and government aided schools. It also aims at countering malnutrition and supporting the right to education of socio-economically disadvantaged children. Since 2001, the applicant has been concerting all its efforts towards providing fresh and nutrition meals to children on every single school day.
d. The applicant is also registered under GST for having rental income in Karnataka, Rajasthan, Uttara Pradesh and Telangana.
e. The TAPF was formed by Trust deed dated 16 Oct 2001, amended on 20 Feb 2016 with the following objects:
Object of the Trust:
Relief of the poor, medical relief education for the public and any other object of general public utility. Without in any way taking away the generality of the meaning of the above expressions the objects particularly shall be:
(a) To uphold and promote the Socio-Economic welfare of the underprivilege
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in sections of society referred to in sub clause (a) & (b) above in general and especially protecting the children of those sections of society against hazardous labour where the Indian children are at present used and exploited.
f. All the activities in connection with the achievement of the above objects will be carried on in India without any commercial motive and the benefits thereof will be available to the public at large without any discrimination on grounds of community or cast or creed or sex.
g. The Ministry of Human Resources Development, Government, of India has prescribed a Model MOU for partnering with NGOs for the implementation of Mid-Day Meal program to all the state governments. The copy of the letter No. 9 – 7/2017/ Desk (MDM) dated 26th April 2017 is enclosed. Few important provisions of the model MOU which has a bearing on the subject is mentioned below. (In the below paragraphs the word First party refers to the Government Authorities and Second Party refers to
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t of accounts in terms of all grants received from the State Government, donations received in the name of Mid Day Meal Scheme, both in cash and kind, duly certified by an approved Auditor to the First Party.
k. The applicant is operating 38 kitchens across 12 States in the country under the above Guidelines. For each of the kitchen a MOU strictly as per the guidelines of MHRD (as mentioned above) has been entered into with the respective authorities. The Applicant has entered into MOU with the respective State Government to serve Mid-Day Meal to children in government schools. The MOU is made under the framework of Revised Guidelines issued by Ministry of Human Resource Development, Govt, of India, issued from time to time. The copy of the latest Guidelines no. 223321 / 2017/ MDM – 2 is enclosed for ready reference. Some important part of the Guidelines are extracted below which has a bearing on the question raised for advance ruling.
l. Responsibility of the State Government
a. C
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scribed format.
2. For other food ingredients and conversion costs, Government would provide the cash conversion cost at agreed rates per child / meal.
3. To enable to reach nutritious, hygienically prepared quality meals to the children, applicant can raise donation, both in cash and kind to meet out deficit
4. All the additional expenses that may be required, on the preparation of the Mid-Day Meal as well as the transportation of the cooked meals to the schools in the project area shall be borne by the applicant
5. Menu will be in accordance as specified by the state Government from time to time.
n. The applicant state that the above terms are mentioned commonly in all the MOUs entered into between the applicant with respective State Government. The copies of MOUs entered with Government of Gujarat for the implementing MDM program in Ahmedabad and with Government of Andhra Pradesh for implementing MDM program in Kuppam town provided with application as sample for reference.
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1st March 2018, copy of sanction letter is enclosed.
q. The applicant also carries out other charitable feeding programs such as Anganwadi feeding, wherein the part of the cost is met by Government Subsidy and the remaining cost is met through donations, private school feeding programs where entire 100% cost is met through donations. These programs are quite small in number and constitute about 10% of the total volume of meals. In none of the above programs, the applicant, charge/ receive any money or consideration from the beneficiaries.
r. In course of providing Mid-Day Meal sometimes certain goods like spices, food grains, kitchen equipment and relevant spares (Boiler, Conveyor Belt Spares etc.), office equipment (Laptop, Computer, Stationery, Letter Head etc.), distribution vehicles are transferred from one kitchen of the applicant to another kitchen situated in a different state. It may be noted that the applicant has taken registration in various states for discharging GST liab
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pecify, by notification, the transactions that are to be treated as-
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.
B. Further, the definition of business under Section 2(17) of CGST Act includes-
(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit;
(b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a);
(c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction;
(d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business;
(e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members;
(f) admission, for a consideration,
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ernment for the transportation charges for lifting food grains from Food Corporation of India godown on basis of the release order.
It is further observed that the applicant is also paid / reimbursed of the cooking cost of the meals as per the instructions/ norms of GOI / State Govt.
While going through the MOU dated 24-10-2016 for Mid- Day Meal Programme between the District Education Officer (DEO), Elementary Education, Jodhpur and Unit President, Akshaya Patra Foundation Jaipur, it is observed that the applicant is receiving conversion charges from the DEO, Jodhpur for cooking of the meal @ Rs. 4.13 (Class I to V) and Rs. 6.18 (VI to VIII) per child per day meal served.
In view of the above observations, the activity of preparation and serving of food under Mid Day Meal and Anganwadi meal programme undertaken by the applicant is covered under definition of business.
C. There is no exemption granted to charitable trusts in case of supply of goods which are taxable and are not spe
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ublic awareness of preventive health, family planning or prevention of HIV infection;
(ii) advancement of religion, spirituality or yoga;
(iii) advancement of educational programmes or skill development relating to,-
(A) abandoned, orphaned or homeless children;
(B) physically or mentally abused and traumatized persons;
(C) prisoners; or
(D) persons over the age of 65 years residing in a rural area;
(iv) preservation of environment including watershed, forests and wildlife;
In view of the above, we observe that the activities undertaken by the applicant are not covered under the definition of charitable activities.
E. The activities undertaken by the applicant under Mid-Day Meal Programme and Anganwadi meals programme is a supply in accordance with the Section 7 of CGST Act, 2017. However, MDM programme is taxed Nil by the virtue of Notification No. 12/2017 dated 28.06.2017 mentioned at serial number 66 heading number 9962.
F. The Preparation and serving of food under
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RGST Act, 2017.
III. The scrap items (as mentioned in statement of facts by the applicant) which generates during course of the activity of Mid-Day Meal in form of empty oil & other tins, pipes & iron, empty bags, plastic items, cartoons, Flex & Boxes, spare parts of machine / equipment, vehicle & its parts like tyres etc. are sold from time to time is for a consideration. The sale proceeds of these items are recorded under the head miscellaneous income in the books of records. The sale of scrap is an activity of sale for a consideration as mentioned in definition of 'supply' as per section 7 of CGST/RGST Act, 2017.
6. In view of the foregoing, we rule as under:-
RULING
A. Preparation and serving of food to children of government schools under Mid-Day meal Program of Government and serving of food under Government sponsored Anganwadi meals program is covered under the scope of 'supply' as per section 7 of CGST/RGST Act, 2017.
B. The transfer of goods / capital equi
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