Case Law Details
In re Mercara Downs Golf Club (GST AAR Karnataka)
Whether the donation amount is taxable under GST or not? If taxable whether the rate of GST applicable on the said donation is 18% or not?
Advance ruling can be sought under Section 97 only for supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Supply, as per Section 7(1), includes all forms of supply of goods or services or both, made or agreed to be made for a consideration by the applicant in the course or furtherance of business.
In the instant case the applicant admittedly is not involved in supply nor intends to supply any goods or services or both to the donor and thus the first limb of the Section 7(1) supra is not fulfilled. Also admittedly there is no quid pro quo involved to treat the amount as consideration and there is no business relationship between the donor and the applicant and hence the receipt of donation is not towards any supply. Thus from the facts brought forth in the application for advance ruling, the applicant admittedly is neither undertaking nor proposed to undertake any supply of goods or services or both to the donor in respect of the donation received and thus there is no supply in terms of Section 7(1) of the CGST Act 2017 and hence the instant application does not qualify as an application for advance ruling in terms of Section 97 read with Section 95(a) and Section 7(1) of the Act, ibid, and is liable for rejection in terms of Section 98(2) of the CGST Act 2017.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, KARNATAKA
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