Question ID : 32753

GST on Supply from Prisons (Jails)

Will GST have to be paid for supplies of goods like furniture etc. made from prisons (Jails)? Earlier, vide Notification No 63/95-C.E dated 16.03.1995, goods manufactured in a prison were exempt from excise duty. Is there any exemption notification in relation to above situation? Early response will be highly appreciated.

Without prejudice, following approach is submitted for member to consider: a. Manufacture is not taxable event in GST. Supply of goods (wherever manufactured) is taxable event. b. Prison is in entry 4, list II and is a Constitutional function of the State c. Sale proceeds belong to the State and all expenses of operating the Prison is met from State grant d. Supplier of goods (manufactured in Prison) is State not the inmate e. Exemption not applicable (sl.no.150 in 2/2017) Hence, goods manufactured in prison when sold for arm's length consideration to an independent buyer (not Government or Government Entity) is taxable in GST. See http://tihartj.nic.in/store_location.asp where articles are sold with a brand name 'TJ'. And there are several news reports that these products are available as made-in-prison.