Grant support without reciprocal supply is outside GST scope and not taxable

A grant received as financial support for project work, without any reciprocal supply of goods or services to the foreign grantor, does not constitute a supply under the GST regime. The arrangement lacked consideration in the GST sense and was not a commercial transaction in the course or furtherance of business; the activities funded by the grant were part of project support, not taxable supplies to the grantor. The grant therefore falls outside the scope of supply under GST and is not liable to tax on that basis.

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Issues: Whether the grant received from the Food and Agriculture Organisation of the United Nations is a supply under the GST law.

Analysis: The grant was sanctioned as financial support for the applicant's project work and not as payment for any goods or services supplied to the grantor. The transaction did not involve a reciprocal supply, did not establish the existence of consideration in the GST sense, and did not bear the character of a commercial transaction in the course or furtherance of business. On the facts disclosed, the activities to be undertaken by the applicant under the grant arrangement were part of the project support mechanism and not a taxable supply to the foreign grantor.

Conclusion: The grant is not a supply under the GST law and is not liable to GST on that basis.

Ratio Decidendi: A gratuitous grant received without a corresponding supply of goods or services and without GST consideration does not fall within the scope of supply under the GST regime.

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