In re Rotary Club of Mumbai Elegant (GST AAR Maharashtra)
Contributions from members, recovered for spending on weekly meetings, other petty administrative expenses amounts to supply
The Hon’ble AAR, Maharashtra in the matter of M/S. Rotary Club of Mumbai Elegant [Advance Ruling No. GST-ARA-26/020-21/B-108 dated December 9, 2021] held that, contributions from club members, recovered for spending on weekly meetings, other petty administrative expenses amounts to ‘supply’ and the activity of collecting contributions and spending towards meeting and administrative expenditures only, is business under Central Goods and Services Tax Act, 2017 (CGST Act).
Facts:
M/S. Rotary Club of Mumbai Elegant (“the Applicant”) is a group of people who carry out various charitable causes and activities from donations received from members, amount collected through various other channels and accruals of the corpus fund. Donations/charity received are used exclusively for the purpose of donation/charity and no amount is utilized for administration purposes. In addition to that, sums are recovered from all the members for expending the same for the weekly and other meetings and other petty administrative expenses incurred which include the expenses for the location and refreshments and facilitation of meetings of its members held for the members to review existing activities and consider new projects for execution. In these meetings, the charitable proposals are considered, discussed & approved or rejected for taking up as a likely cause for execution. No facilities/benefits are provided such as recreation etc. by club.
Furthermore, the administration and working of the Applicant and implementation of policies are established and implemented on the concept of mutuality.
Issues:
1. Whether contributions from the members, recovered for expending the same for the weekly and other meetings and other petty administrative expenses incurred including the expenses for the location and light refreshments, amounts to or results in a supply, within the meaning of supply and leviable to tax?
2. Whether the activity of the Applicant would be considered as ‘business’ as envisaged under Section 2(17) of the CGST Act?
Held:
The Hon’ble AAR, Maharashtra in Advance Ruling No. GST-ARA-26/020-21/B-108 dated December 9, 2021 held as under:
