The Telangana Authority of Advance Ruling ( AAR ) ruled that GST exemption allowable on supply of dal to department for women, children, disabled and senior citizens. The applicant M/s. Narayan Trading Corporation is a registered taxpayer under the CGST & SGST Act, 2017 and is actively engaged in the trading of Food grains, Sugars, Edible Oils etc., for the past 30 Years and is a government contractor for supply of above said items directly and through nodal agencies as appointed by the Ministry from time to time.

The Department for Women, Children, Disabled & Senior Citizens in September 2022 has floated a tender for supply of Red Gram Dal Procurement through HACA who are nominated as nodal agency vide G.O. RT No. 69 dated 07/04/2017. The supply of Red Gram is meant for all the ICDS projects in the state.

The HACA will call for tenders on behalf of the Women Dev. & Child Welfare Dept., for the supply of Red Gram Dall. According to the applicant the Department for Women, Children, Disabled & Senior Citizens of the State of Telangana is buying packaged commodities, directly from the manufacturer or from wholesale dealers for use by that institution and not for commercial or trade purpose and that the levy of GST on unbranded food grains, pulses, flours etc., has come to forefront only after the introduction of Notification No. 6/2022 – Central Tax (Rate) dated 13th July 2022. It was submitted by the applicant that they are making supplies to M/s. Hyderabad Agricultural Cooperative Association Limited ( HACA ) Hyderabad, which has come into being in the year 1949, to serve the farming community of the erstwhile State of Hyderabad. That HACA commenced the functioning from 01.07.1949. Originally, the area of operation of the society covering (16) districts of the then Hyderabad State. The Society thus comes under the Multi State Cooperative Societies Act 1984.

HACA is an Apex Co-operative Marketing Society of the erstwhile state of Hyderabad. A Two-Member Bench comprising S.V. Kasi Visweswara Rao and Sahil Inamdar observed that “The goods supplied by the applicant through the Nodal Agency – Hyderabad Agricultural Co-operative Association Limited ( HACA ) does not attract GST provided the following conditions are fulfilled: i. The packaged commodities are bearing a declaration ‘not for retail sale”, ii. The purchase is made directly from the manufacturer or from an importer or from wholesale dealer iii. The purchase is made for use by that institution and not for commercial or trade purpose”.