In re Archipel India Foundation (GST AAR Andhra Pradesh)
In a recent ruling by the Authority for Advance Ruling (AAR) in Andhra Pradesh, the case of Archipel India Foundation brought to light significant considerations regarding the Goods and Services Tax (GST) on composite supplies, particularly within the scope of agricultural, forestry, fishing, and animal husbandry support services. This article aims to dissect the ruling, providing clarity and guidance for organizations engaged in similar domains.
Archipel India Foundation, positioned as a social enterprise, sought to clarify the GST implications of its activities under a specific project agreement. The foundation’s work, aimed at environmental conservation and agricultural improvement, raised questions about its classification under GST as a ‘composite supply’ and whether its principal supply falls under “Support services to agriculture, forestry, fishing, animal husbandry,” as specified in Notification 11/2017-Central Tax (Rate) dated June 28, 2017, which could potentially qualify for a NIL GST rate.
Upon careful examination, the AAR concluded that the foundation’s activities did not qualify as composite supply with the principal supply being the support services in question. This decision was primarily based on the foundation’s involvement in carbon credit trading, which was seen as a commercial operation rather than purely agricultural or environmental support. This interpretation meant that the foundation’s activities were not eligible for the sought GST exemption under the specific notification.
Read AAAR Order: GST AAAR Andhra Pradesh Ruling on Composite Supply for Carbon Credits
