2024 (3) TMI 321 - AAR - GST

Eligibility for tax exemption under GST Act - mixed supply - ticket charges collected in relation to an Agricultural exhibition - applicant Regional Agricultural Research Station, Pilicode falls under the definition of Governmental Authority or not - HELD THAT - Entry no. 1 of the Eleventh Schedule of the Constitution covers Agriculture, including agricultural extension. Therefore, Agriculture and its extension is a function entrusted to Panchayat under Article 243G of the Constitution - it can be seen that the Kerala Agriculture University and its Regional Agricultural Research Stations are established under the KAU Act for the purpose of extension of Agriculture in the State of Kerala and the Government has more than 90% control over the University and its research institutions. Accordingly, the applicant Regional Agricultural Research Station, Pilicode falls under the definition of Governmental Authority . The ticket charges collected by the applicant is for admission to the said Carnival. Thus it can be seen that the above activities provided in the Carnival by the applicant are the activities in relation to agriculture and its extension. As such, if the ticket charges collected by the applicant, a Governmental Authority, is exclusively meant for admissions to the aforementioned exhibitions in the Carnival which is in relation to the functions enlisted under Article 243G of the Constitution then only it is exempted from payment of GST by virtue of SI. No. 5 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended from time to time. The amount collected from tickets will be taxable @ 18% in accordance with clause (b) of section 8 of the CGST Act as the supply is a mixed supply of service as defined under sub-section (74) of section 2 of the CGST Act. The applicant is eligible to claim exemption from payment of GST on ticket charges vide SI. No. 5 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended from time to time, subject to the condition that the services provided by the applicant on receipt of ticket charge shall be the activities in relation to the functions enlisted under Article 243G of the Constitution.

Summary

Issues Involved:
1. Eligibility for tax exemption under GST Act on ticket charges collected in relation to an agricultural exhibition.

Summary:

Issue 1: Eligibility for tax exemption under GST Act on ticket charges collected in relation to an agricultural exhibition

The applicant, a research center under Kerala Agricultural University, sought an advance ruling on whether ticket charges collected for an agricultural exhibition, "Farm Carnival 2023 - Saphalam," are exempt from GST.

The applicant contended that the event was not for revenue generation but for the welfare of farmers and the local community, showcasing various agricultural research and technologies. They highlighted that the University provided an advance of Rs. 50,000 for initial expenses, which was to be adjusted against ticket revenue.

The Jurisdictional Officer confirmed there were no pending proceedings against the applicant under CGST and KSGST Acts 2017.

The Authority examined the facts and submissions, noting that the applicant is a registered taxpayer under CGST and Kerala SGST Act 2017 and had already paid GST on the collected ticket charges. The applicant is a Public University established under the Kerala Agriculture University Act, 1971, with more than 90% control by the Government, thus qualifying as a "Governmental Authority."

As per Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, services by a Governmental Authority in relation to functions entrusted to a Panchayat under Article 243G of the Constitution are exempt from GST. The Authority concluded that the activities conducted during the carnival, which included agricultural exhibitions and training, fall under the functions listed in Article 243G.

However, if the carnival included other activities not related to these functions, such as entertainment events, the exemption would not apply, and the ticket charges would be taxable at 18% as a mixed supply of services.

Ruling:

The applicant is eligible to claim exemption from GST on ticket charges for activities related to functions listed under Article 243G of the Constitution, as per SI. No. 5 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. If the ticket charges include access to unrelated activities, the charges are taxable at 18%.