The Tamil Nadu Authority of Advance Ruling (AAR) held that no GST on services rendered towards handling of Dhothies & Sarees, School Uniforms from Co-operative Societies to Public Distribution System.
The applicants have contended that they have been appointed and acting as a Nodal Agency to inspect and procure Cost Free Distribution Sarees & Dhothies and Cost-Free School Uniform under Government Flagship Schemes. The Cost-Free Distribution of Sarees and Dhothies Scheme was introduced during the year 1983 as one of the flagship schemes by the Government of Tamil Nadu. This scheme has been continued by the Government of Tamil Nadu with the twin objectives of providing continuous employment to 14,000 handloom weavers and 54,000 Power loom weavers in the State and for distribution of Sarees and Dhothies to the poor people living in rural and urban areas in Tamil Nadu. For Pongal 2021, 167.39 lakh Sarees and 167.29 lakh Dhothies were procured from Weavers Co-operative Societies at a cost of Rs. 484.25 crore and dispatched to all the Taluks of Tamil Nadu for onward distribution to the beneficiaries on the eve of Pongal every year.
The applicant has sought the advance ruling on the issue of whether the claim of expenses incurred to handle the Cost Free Distribution Sarees & Dhothies and Cost-Free School Uniform Scheme and supply to Revenue Department/Social Welfare Department will attract 18% GST or not.
The coram of K.Latha and T.G.Venkatesh held that the services rendered by the applicant towards handling of Dhothies & Sarees/ School Uniforms from Co-operative Societies to Public Distribution System / Revenue Department are exempted from payment of GST as per serial number 3 of the table given in GST Notification No. 12/ 2017 – Central Tax (Rate) Dated: 28.06.2017 as amended read with SI. No. 3 of Annexure to notification Ms. No. 72/2017 dated 29.06.2017
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