This decree of the High Court of Gujarat is a lesson for those medical stores who are selling medicines while wearing the mask of the charitable trust. The Honourable Court has held that the medical store that is run by the charitable trust shall be considered as a business even if it is selling medicines at the subsidized rates and consequently such medical stores are required to be registered under the Goods and Services Act 2017.
And by simple calculation, this has been a majority decision as earlier the same decree was held by AAR Gujarat and AAAR Gujarat.
“Both the authorities have in detail considered the submissions and the issues raised by the petitioner Trust and held that the Medical Store run by the Charitable Trust would require GST Registration 
Under GST regime, registration is the foremost and the essential step for existing taxpayers as without registration they would not get GSTIN number which is a basic identity number of a taxpayer and that the Medical Store providing medicines even if supplied at a lower rate would amount to supply of goods. The Court does not find any illegality or infirmity in the said orders passed by the authorities,” a division bench of Justices Bela M Trivedi and A C Joshi said in a recent ruling.
Here, in this case, the petitioner is the registered charitable trust that is concerned with carrying on the eye and the research activities through the CH Nagri Municipal Hospital in addition to the procurement and the management of the funds for the objective of providing education and charitable activities in the domain of eye research and the prevention of blindness.
Adding further, the trust is also concerned with running the medical. It is important to mention that at this medical store medicines to both indoor and outdoor patients are sold at subsidized rates. The petitioner added that whatever minimal amount is left with the medical store is used for administration and meeting of unforeseen contingencies.
Earlier, the aforesaid trust filed a petition at Authority for Advance Ruling (AAR) 
Get to know about AAR (Authority for Advance Rulings) under GST India along with its mechanism. Also, we have described its objectives, powers, orders, etc to obtain an advance ruling on whether
- GST Registration is required for running a medical store
- ‘Providing the medicines at subsidized rates’ can be termed as the supply of goods.
Finally, The AAR replied a positive response to the aforesaid questions. Later on, this ruling was upheld by the AAAR. And the trust finally approached the Honourable Gujarat High Court. Finally, the Honourable High Court upheld the decision of AAAR.
Contention of Petitioner
The petitioner contended that the selling of medicine at a subsidised rate without the intention of earning a profit cannot be termed as a business within the meaning of section 2(17) of the CGST Act.
After hearing, the bench observed that although the petitioner is selling medicines at concessional rates it is selling medicines for consideration. So the submission by the petitioner about such sale, not a ‘business; cannot be accepted.
