Case Law Details
In re All India Institute of Medical Sciences (GST AAR Telangana)
In a significant ruling by the Goods and Services Tax Authority for Advance Rulings (GST AAR) in Telangana, the All India Institute of Medical Sciences (AIIMS), Bibinagar, has been deemed ineligible for GST exemption on pure services procured from vendors. This decision, stemming from an application by AIIMS for clarity on GST exemptions, underscores the intricacies of GST laws and their implications for educational and healthcare institutions in India.
The case presented by AIIMS Bibinagar revolved around the institution’s procurement of various services essential for its operation, including manpower, housekeeping, and security services. AIIMS, a central educational and healthcare institution, posited that these services, being ‘pure services,’ should be exempt from GST, citing their crucial role in delivering healthcare and medical education.
The institution’s argument was built on the premise that, as an entity established under an Act of Parliament and functioning under the Ministry of Health & Family Welfare, it should be considered a governmental authority and, thus, eligible for GST exemptions as per Notification 12/2017. This notification outlines exemptions for services to the Central Government, State Governments, Union territories, and local authorities.
However, the GST AAR Telangana’s examination revealed a crucial distinction. Although AIIMS Bibinagar is indeed a creation of an Act of Parliament and operates under the aegis of the Ministry of Health & Family Welfare, it does not qualify as ‘Central Government’ but rather as a ‘Governmental Authority.’ The notification in question had, with effect from January 1, 2022, omitted ‘Governmental Authority’ from the entities entitled to GST exemption on services. Consequently, AIIMS’s claim for GST exemption on the pure services received from its vendors was denied.
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