Classification of service— In the instant case, the applicant approached the Authority for Advance Ruling to seek clarification on the activities of procurement and supply of Drugs, Medicines, Surgical and other equipment. 

The applicant seeks advance ruling on the following:

1. Whether the procurement and distribution of drugs, medicines and other surgical equipment by APMSIDC on behalf of government without any value addition, and without any profit or loss, without even the intent to do business in the same amounts to Supply under Section 7 of CGST/SGST Act.

2. Whether the establishment charges received from the State Government as per G.O.Rt 672 dated 20-5-1998 and G.O.Rt 1357 dated 19-10-2009 by APMSIDC is eligible for exemption as per Entry 3 or 3A of Notification 12/2017-Central Tax (Rate)?

APMSIDC is a Society, which was established in pursuance to a G.O issued by the State Government of Andhra Pradesh to discharge one of the functions entrusted to panchayat i.e., public health. 100°/o of the equity and control are held by the Government of Andhra Pradesh alone. The total management is overseen by the Board of Directors who are all nominated by the Government of Andhra Pradesh.

Held that— The procurement and distribution of drugs, Medicines and other surgical equipment by APMSIDC on behalf of government without any value addition, and without any profit or loss, without even the intent to do business in the same amounts to Supply under Section 7 of CGST Act.

The establishment charges received from the State Government as per G.O.Rt 672 dated 20-5-1998 and G.O.Rt 1357 dated 19-10-2009 by APMSIDC is not eligible for exemption as per Entry 3 or 3A of Notification 12/2017 Central Tax (Rate).