In re The Kerala State Ex-Servicemen League (GST AAR Kerala)
Summary: The Kerala State Ex-Servicemen League (KSESL), a charitable society registered under the Travancore-Cochin Societies Registration Act, 1955, sought an advance ruling on the applicability of GST to part payments made during the COVID-19 lockdown by one of its service recipients, the Vikram Sarabhai Space Centre (VSSC). KSESL functions as a welfare organization dedicated to assisting ex-servicemen in securing suitable employment, mainly through manpower supply contracts with government departments and public sector undertakings. The organization states that it operates in a non-commercial manner, does not earn income from manpower supply services, and disburses the entire payment received from the service recipient to the deployed employees after deducting applicable GST. It also submits that it does not collect any commission from the wages of ex-servicemen.
The applicant explained that the service engagement process involves preparing panels of eligible ex-servicemen upon request from government departments, followed by an agreement between KSESL and the employer regarding wages and service conditions. The service recipient transfers the total contracted wages to KSESL, which then disburses these to employees based on statements provided by the employer. According to the applicant, GST is regularly remitted on the total sanctioned amount except for the payments at issue. KSESL clarified that the instant dispute arose from part payments made by VSSC during the nation-wide lockdown between 23 March 2020 and 31 May 2020, when no services were performed.
