States, UTs need GST number for grain: Centre

States, UTs need GST number for grain: Centre
All states and Union Territories will have to obtain a Goods and Services Tax (GST) number in order to procure grain from the Food Corporation of India (FCI) for midday meal in schools.

They, however, would not have to pay any GST against their transactions with the FCI as the "unbranded” foodgrain is exempted from the GST.

The GST number is required to be obtained to enable the FCI file its return under the law, the Human Resource Development (HRD) ministry has clarified to all state governments. This comes after regional offices of the FCI sought GST number from some of the states for supply of foodgrain under the centrally-sponsored midday meal scheme recently, prompting them to seek a clarification from the HRD ministry.

"In order to resolve the above issue, the advice of the Food Corporation of India was solicited," a HRD ministry official said.

The FCI in its communication to the HRD ministry on September 11 said that though the foodgrain supplied by the corporation comes under the GST exempted category, Section 31 (3) (c) of the Central GST Act stipulates that a registered person supplying exempted goods or services "shall" issue a bill of supply for such goods and services.

The said bill of supply must bear mandatory details such as name, address and GST number of the recipient for enabling the FCI to file GST return.

"In view of the clarification from the FCI, the state governments have been conveyed that they are required to get themselves registered under the GST for obtaining a GST number. However, no GST will be payable by the states or Union Territory on the foodgrain supplied by the FCI under the midday meal scheme because unbranded foodgrain is exempted from the the GST net," the official added.


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