Mattresses supplied to school hostels not exempt from GST: Tamil Nadu AAR

Hosur Coir Foams' supplies will draw 18 per cent integrated GST, rules authority

The supply of mattresses by a company in Tamil Nadu to school hostels in other states is not exempt from goods and services tax (GST), ruled the state’s authority for advance rulings (AAR).

The kind of mattresses that Hosur Coir Foams Pvt. Ltd. supplied will draw 18 per cent integrated GST (IGST), the authority ordered.

The company supplied rubberised coir mattresses, which fall under the harmonised system of nomenclature (HSN) code 9404. The tax rates under the GST regime are based on the classification of products in HSN code.

The company wanted to know the IGST rate, particularly on supply of such mattresses to hostels of government schools run by the department of social welfare in Karnataka. It supplied the mattresses through Coir Industrial Cooperative Society Ltd. under a tender process.

The company also sought a general ruling on supply of these mattresses to hostels of any educational institutions in other states. The company was under the impression that these supplies to education institutions would be exempt from GST.

The court ruled that IGST at the rate of 18 per cent would be imposed on both kinds of supply.

The court said a notification issued by the government in June 2017 on the effective rate of tax for inter-state supply of goods has not provided any exemption or concessional rate of IGST based on end use of mattresses.

Inferring from the order, experts say that goods, unlike services, supplied to educational institutions would draw IGST.

Sandeep Sehgal, partner-tax at AKM Global, said the AAR ruling emphasizes on the difference between supply of goods and services provided to educational institutions.

“The authority has clarified that the exemption notification is available only for the supply of services but does not apply to the supply of goods to educational institutions,” he said.