Commercial Activities by Trust registered u/s 12AB

[Mratunjaya Vajramatti]

Dear sir/madam

A trust registered u/s 12AB running an ayurvedic college and a teaching hospital under it. Teaching hospital gives services and also sells drugs to inpatients.

Suppose Trust plans to opens a medical shop within the premises of college and to extend sale of drugs and other pharmaceutical products to outsiders. can a trust do that??

AI Summary

Charitable purpose: educational trusts may run commercial drug shops if objects clause permits and case law considered.
A trust whose dominant object is education may engage in commercial activities without being per se excluded from charitable purpose, provided such activities are consistent with and ancillary to the objects clause; where the object is advancement of a public utility different rules apply. Determination requires scrutiny of the objects clause, the nature and scale of the commercial operation, and applicable judicial ratio, notably the Supreme Court's decision in New Noble Educational Society v. Chief Commissioner (2022).