Medical Store Operated by Charitable Trust Requires GST Registration for Supply of Medicines

The Court upheld the orders of the Gujarat Appellate Authority for Advance Ruling and Gujarat Authority for Advance Ruling, requiring GST registration for a medical store operated by a charitable trust. It determined that providing medicines, even at reduced rates, constituted a supply of goods in the course of business, necessitating registration. Despite the trust's argument that its activities were non-commercial and for charitable purposes, the Court found that the sale of medicines fell within the definition of business under the CGST Act. As a result, the petition challenging the orders was dismissed for lacking merit.

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Issues:
Challenge to order of Gujarat Appellate Authority for Advance Ruling and Gujarat Authority for Advance Ruling regarding GST registration for a medical store run by a charitable trust and whether providing medicines at a lower rate amounts to supply of goods.

Analysis:
The petitioner, a charitable trust, challenged the order of the Gujarat Appellate Authority for Advance Ruling (GAAAR) confirming the Advance Ruling of Gujarat Authority for Advance Ruling (GAAR) regarding GST registration for its medical store and whether providing medicines at a lower rate constitutes supply of goods. The petitioner contended that its activities did not qualify as "business" under the CGST Act and were not for pecuniary benefit. The petitioner Trust argued that it operated the medical store to fund charitable activities and mitigate unforeseen expenses, not for profit. However, the authorities upheld the requirement for GST registration and deemed the sale of medicines as supply of goods, dismissing the petitioner's appeal.

The petitioner relied on Section 2(17) of the CGST Act to argue that its activities did not fall under the definition of "business" as they were not for trade or commerce or pecuniary benefit. The petitioner emphasized that it provided benefits to patients under government schemes, indicating a non-commercial motive. The Court examined Section 7(1) of the Act, defining "supply," and Section 22(1), mandating registration for suppliers exceeding specified turnover. The Court noted that the petitioner's sale of medicines, even at reduced rates, constituted a supply for consideration in the course of business, necessitating GST registration. The Court rejected the petitioner's argument that the sale of medicines did not qualify as trade or commerce under the Act, emphasizing that the definition of "business" encompassed all activities, regardless of pecuniary benefit.

Ultimately, the Court found no legal flaw in the decisions of the authorities, which upheld the requirement for GST registration for the medical store run by the charitable trust and deemed the sale of medicines, even at reduced rates, as supply of goods. Consequently, the petition challenging the orders was dismissed summarily for lacking merit.

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