GST AAR WEST BENGAL – ADVANCE RULING
Whether the activities that are undertaken by the applicant may be termed as “business” or not???
ACTIVITIES/FACTS:- THE ASSOCIATION OF INNER WHEEL CLUBS IN INDIA
The Applicant is affiliated to International Inner Wheel, one of the largest women’s service voluntary organizations in the world, and the organization is involved in social welfare work with the aim of helping people live better lives.
- Members of the Clubs which fall under the Applicant organize events which combine personal service, fund raising, fellowship and fun, united by friendship and to serve the local community.
- They provide financial and other practical support to the financially disadvantaged classes, including people suffering from natural disaster or in war-torn regions.
- The club accumulates funds through subscriptions, sponsorship fees, the sale of souvenirs etc.
- The Clubs which fall under the Applicant do not provide any facility or benefit to any of its member.
- The subscriptions/membership fees collected from the members are utilized entirely for funding charitable work.
AAR FINDINGS & CONCLUSION
- It is from the facts that the Inner Wheel Clubs have specific objectives and members are granted various facilities and/or benefits and enabling them to attend conventions/meetings for the furtherance of the objectives of the Organization, against subscriptions or fees, renewable annually (members). Such facilities/benefits are not available to the non-members of the Organization.
- It appears that the fund collected is mainly spent on organizing meetings and conventions like Triennial etc. Clearly, such meetings and gatherings provide facilities and benefits to the members in the form of a platform for social mixing, networking, promotion of friendship etc.
- AAR held that the term “business” under the GST Act includes, “provision by a club, association, society, or any other body (for a subscription or any other consideration) of the facilities or benefits to its members. It is, thus, clear that the Applicant is doing “business”. The subscription and membership fee is to be considered as consideration for the supply of such services, which are classifiable under SAC Heading 99959 under the category ‘Services furnished by other membership organization’.
- The Applicant also has activities which involve providing space for advertisements, raising sponsorship etc., and the transactions regarding these activities are, therefore, business transactions. Such services are classifiable under SAC Heading 99836 under the category “Advertising services‟.
- Sale of souvenirs is to be treated as a supply of goods.
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