ITC can claim Pharmacy if run on Hospital Pan

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This discussion addresses whether a hospital operating under an educational trust with 12AA exemption can run a pharmacy under the trust's PAN and claim tax exemptions on its profits. It also queries the eligibility for claiming full or proportionate GST Input Tax Credit (ITC) on medicine bills. The advice suggests that if GST is charged on medicine sales, ITC can be claimed, and using the trust's PAN is permissible as long as such business income remains incidental to charity (up to 20%). However, if the pharmacy is exempt from GST, then ITC cannot be claimed.

dev

dev (Querist)
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13 November 2020 Our Hospital is under a Educational Trust which have a 12AA Exemption from income tax department.
now our question is ?
1. if we make pharmacy under Trust pan no. then we can got examption u/s 12aa on pharmacy profit
2. Can we claim ITC of Medicine bills full or proportionately under Gst Act.
please give your correct and prompt advised.
thanks

Lekhraj sood

Lekhraj sood (Expert)
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13 November 2020 If you are getting exemption from GST then you can not ITC , in part or full for pharmacy business.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 November 2020 If you are issuing tax invoice and charge GST on sale of medicine you can claim ITC on purchase of those medicine. No problem of using trust PAN 20% of such business income incidental to charity allowed.

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