Charitable Trust running medical store to give medicines without profit required to be registered under GST

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Brief summary of the case

Petitioner: Nagri Eye Research Foundation
Respondent : Union of India
Date of decision: 09.07.2021
Judges: Honourable Ms. Justice Bela M. Trivedi and Honourable Dr. Justice Ashok Kumar C. Joshi


  1. Petitioner trust is also running a medical store where the medicines to the indoor and outdoor patients of the petitioner Hospital are sold at a lower rate.
  2. The petitioner Trust had filed an application before the GAAR (the Gujarat Appellate Authority for Advance Ruling, Goods and Service Tax) under Section 97 of the Central Goods and Services Tax Act, 2017 seeking advance ruling on the following questions :-
  3. GST Registration is required for medical store run by Charitable Trust? And
  4. Medical store providing medicines at a lower rate is it amounts to supply of goods?
  5. The GAAR vide the Advance ruling dated 19.05.2020 came to the conclusion that the petitioner Trust was required to obtain GST Registration for the medical store run by the Trust and that the medical store providing medicines at a lower rate amounted to supply of goods.

Argument by Petitioner

  1. The activities carried on by the petitioner Trust by running a medical store could not be said to be a “business” within the meaning of Section 2(17) of the CGST Act, inasmuch such activities can neither be said to be a trade or commerce nor for any pecuniary benefit.
  2. Petitioners give benefits to patients under various schemes floated by the Central / State Government and in such a situation, also the activity could not be said to be a business activity.

Argument by Respondent

  1. Section 22(1) of the CGST Act mandates that every supplier is liable to be registered under the Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees, provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.
  2. The definition of the word ‘business’ as contained in Section 2(17) of the CGST Act, which reads as under :- “(17) “business” includes – (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit;”


  1. A sale could not said to be a “business” in view of the definition contained in Section 2(17) of the said Act cannot be accepted.
  2. Petitioner has failed to substantiate or justify his submission as to how such activity of selling medicines to the patients for consideration could not be said to a trade or commerce.  
  3. The Court does not find any illegality or infirmity in the said orders passed by the authorities.

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