GST Educational Society

Hi Sankar,

Here’s a detailed clarification on your GST query regarding the Educational Society:

1. Exemption on Machinery Purchase for Educational Society

• Is the Educational Society exempt from GST on machinery purchase?
  Under Notification No. 12/2017-Central Tax (Rate) dated 28 June 2017, certain goods supplied to educational institutions are exempt from GST. But this generally applies to institutions that are registered under the Educational Institutions category and fulfilling specific conditions (mainly for imparting education).

• Since your society is running a Homeopathy Medical College, it may qualify as an educational institution if it is recognized and providing education.

• However, the exemption typically applies to supply of goods or services for educational purposes. Machinery for manufacturing medicine (even if free distribution) may not be directly exempt unless specifically covered.

2. Medicines for Free Distribution

• The manufacturing of Covid-19 immunity medicine intended for free distribution might attract exemption under health-related supplies, but exemption on machinery purchase depends on the classification of the recipient (your society) and the purpose.

• Generally, exemption on inputs or machinery is granted if the final product or service supplied by the institution is exempt.

• If the society is registered as an educational institution under GST and the machinery is used for non-commercial, educational purposes, exemption can apply.

3. GST Registration for Society

• If the society is not registered for GST, but turnover exceeds threshold limits, it may be required to register.

• To avail exemption, registration may be necessary to provide proper documentation to the supplier.

4. Documents to Provide Supplier for GST-Free Supply

• To supply without GST, the supplier usually needs to see a GST exemption certificate or a notification reference.

• If your society qualifies for exemption, a declaration letter quoting the relevant GST exemption notification may suffice.

• In some cases, a certificate from the GST department confirming exemption status is required.

5. Procedure to Get GST Exemption Certificate

• There is no specific exemption certificate issued by GST authorities in general for all categories.

• Instead, the exemption is availed based on applicable notifications.

• Your society should apply for GST registration (if not registered).

• Once registered, you can provide the supplier a self-declaration stating that the purchase is covered under specific GST exemption notification (like Notification 12/2017).

• The supplier should verify and accordingly supply without GST.

Summary:

Next Steps:

• Confirm if society is registered as an educational institution under GST.

• Confirm the nature of machinery usage aligns with exemption conditions.

• Register society under GST if applicable.

• Provide supplier a declaration referencing Notification No. 12/2017.