Regional Agricultural Research Station qualifies as Governmental Authority due to 90% government control, ticket charges taxable at 18% but GST exemption applies under section 8

AAR Kerala held that Regional Agricultural Research Station, Pilicode qualifies as a Governmental Authority under the Constitution as Kerala Agriculture University has over 90% government control and operates under Article 243G functions. The station's ticket charges for agricultural exhibition carnival constitute mixed supply of services taxable at 18% under CGST Act section 8. However, GST exemption applies under Notification No. 12/2017-Central Tax (Rate) SI. No. 5, provided the services relate exclusively to constitutional functions under Article 243G concerning agriculture and its extension activities.

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Issues Involved:
1. Eligibility for tax exemption under GST Act on ticket charges collected in relation to an agricultural exhibition.

Summary:

Issue 1: Eligibility for tax exemption under GST Act on ticket charges collected in relation to an agricultural exhibition

The applicant, a research center under Kerala Agricultural University, sought an advance ruling on whether ticket charges collected for an agricultural exhibition, "Farm Carnival 2023 - Saphalam," are exempt from GST.

The applicant contended that the event was not for revenue generation but for the welfare of farmers and the local community, showcasing various agricultural research and technologies. They highlighted that the University provided an advance of Rs. 50,000 for initial expenses, which was to be adjusted against ticket revenue.

The Jurisdictional Officer confirmed there were no pending proceedings against the applicant under CGST and KSGST Acts 2017.

The Authority examined the facts and submissions, noting that the applicant is a registered taxpayer under CGST and Kerala SGST Act 2017 and had already paid GST on the collected ticket charges. The applicant is a Public University established under the Kerala Agriculture University Act, 1971, with more than 90% control by the Government, thus qualifying as a "Governmental Authority."

As per Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, services by a Governmental Authority in relation to functions entrusted to a Panchayat under Article 243G of the Constitution are exempt from GST. The Authority concluded that the activities conducted during the carnival, which included agricultural exhibitions and training, fall under the functions listed in Article 243G.

However, if the carnival included other activities not related to these functions, such as entertainment events, the exemption would not apply, and the ticket charges would be taxable at 18% as a mixed supply of services.

Ruling:

The applicant is eligible to claim exemption from GST on ticket charges for activities related to functions listed under Article 243G of the Constitution, as per SI. No. 5 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. If the ticket charges include access to unrelated activities, the charges are taxable at 18%.

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