Charitable organisation activities under GST?

Writer: CS Payal Kataria

Registering charitable organisations under Section 12AA of Income Tax Act 1961 doesn’t mean that all the activities carried by such organisations are exempt from GST. Even charitable institutions should see each and every transaction from GST lens. Recently, the Authority of Advance Rulings (AAR) for GST in Maharashtra has held that Income from the sale of products such as booklets, magazines & DVD and providing accommodation and food by religious organisations on payment are not charitable activities thereby GST is liable to be paid. It is held that this activity fall under the definition of business and supply.

This AAR is good piece of learning for all stake holders. Following are the lessons to be learnt from this AAR:
o It may be possible that even due to single transaction or activity one may be required to take registration under GST
o It is time to rethink and start testing transactions for GST applicability or non-applicability
o In the process of understanding transactions never forget to read CGST Act 2017, Section 2 (17) Definition of business and Section 7 Supply.

Thus, clarity of fundamental principle of ‘business’ and ‘supply’ from GST of view is very important

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Readers are advised to consult the professional for understanding applicability of this writeup in the respective scenarios. While due care has been taken in preparing this writeup, the existence of mistakes and omissions herein is not ruled out. No part of this writeup should be distributed or copied (except for personal, non-commercial use) without our written permission.

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