Service tax on Grant in aid from Govt.of India

[Nataraj Nagarajan]

Dear Members

Greetings for the day

We are a commercial Food testing laboratory based at Bangalore.We have received Grant-in-aid from ministry of food processing industries for purchase of Instruments/equipments. We would like to whether we need to pay service tax for receiving such grants from the ministry.

We are little concerned on this.

We would like to have your guidance on the same.

Thanks

Nataraj.N

[KASTURI SETHI]

Grant-in-Aid received from Govt. is not consideration. Such grant-in-Aid has not been received in lieu of service. Rest depends upon the terms and conditions of an agreement or contract executed with Govt. Also this case law:-

2015 (38) S.T.R. 421 (Tri. - Mumbai)  = 2015 (1) TMI 388 - CESTAT MUMBAIMINERAL EXPLORATION CORPORATION LTD. Versus COMMR. OF C. EX., NAGPUR

[Nataraj Nagarajan]

Dear Sir

Thanks for your timely inputs and advice

AI Summary

Grant to Bangalore Food Lab Not Subject to Service Tax, Clarification Provided with Case Law Reference A commercial food testing laboratory in Bangalore received a grant-in-aid from the Ministry of Food Processing Industries for purchasing equipment and sought advice on whether this grant is subject to service tax. A respondent clarified that such grants are not considered as payment for services and hence are not subject to service tax, unless specified otherwise in the terms of any agreement with the government. The response referenced a relevant case law for further context. The original query was acknowledged with gratitude for the advice received.