In re Jayshankar Gramin Va Adivasi Vikas Sanstha (GST AAR Maharashtra)
Question 1:- Whether applicant is required to obtain registration under the Maharashtra Goods and Service Tax Act, 2017?
From a perusal of the submissions made by the applicant it is seen that the main thrust of its argument is that the activity of supply by the applicant trust are fully exempted from levy of tax under the provisions of Sr.No. 1 of Notification No. 12/2017 C.T. (R) dated 28.06.2017 i.e. Services supplied by an entity registered under Section 12AA of the Income-Tax Act, 1961 (43 of 1961) by way of charitable activities. Since we have found that the activities undertaken by the ‘applicant do not conform strictly to the definition of a ‘charitable activity, the applicant shall obtain registration under GST Act.’
Question 2:- If answer to above question is affirmative, whether the applicant is liable to pay GST on the amounts received in the form of Donation / Grants from various entities including Central Government and State Government.
Answer:- Answered in the affirmative in cases of grants received. In case of donations, if the gift or donation is made to a charitable organization; the payment has the character of gift or donation and the purpose is philanthropic (i.e. it leads to no commercial gain) and not advertisement, then GST is not leviable. In all other cases GST is leviable.
Question 3:- If answer to above question 2. is affirmative, what will be the rate at which the GST would be charged.
Answer- GST would be charged @18% (CGST 9% and SGST/UTGST 9%/IGST 18%).
Read AAAR Order: No GST on reimbursement for charitable activities received from Government by Trust
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, MAHARASHTRA
The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act” respectively ] by M/s. Jayshankar Gramin Va Adivasi Vikas Sanstha, the applicant, seeking an advance ruling in respect of the following questions.
1. Whether applicant is required to obtain registration under the Maharashtra Goods and Service Tax Act, 2017?
2. If answer to above question is affirmative, whether the applicant is liable to pay GST on the amounts received in the form of Donation / Grants from various entities including Central Government and State Government.
3. If answer to above question 2 is affirmative, what will be the rate at which the GST would be charged?
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression ‘GST Act’ would mean CGST Act and MGST Act.
2. FACTS AND CONTENTION – AS PER THE APPLICANT
2.1 The applicant is Charitable trust registered under Maharashtra Public Charitable Trust Act 1950 w.e.f. 15-02-1993. The Trust, Jayshankar Gramin VA Adivasi Vikas Sanstha Sangamner (hereafter referred as trust) is also registered under Societies Act vide registration number Maha/2041/92 w.e.f. 23/12/1992. The applicant is registered under section 12AA of the Income Tax Act 1961 w.e.f. 08/10/2009.
2.2 The trust has it’s head office at 1st floor, Madhav Parvati complex, veer savarkar Marg, Sangamner. The destitute home for children is located at Akole bypass road, Sangamner.
2.3 The trust undertakes supply of services to 50 orphans and homeless children by way of shelter, education, guidance, clothing, food and health for the Women and Child welfare. The Govt of Maharashtra women and child welfare department pays a sum of Rs. 2,000/ per month per child. Other expenses for children are made from donations. The trust is also registered under Income Tax Act 1961 as Charitable trust vide registration number PN/CIT I/REGN./12A (a)/63/2009-10/5304. The trust is also registered under section 80G (5) of Income Tax Act.
2.4 The trust also render services to destitute women who are litigating divorce or homeless or the victim of domestic violence. Central Government also gives grants though Women and Child Welfare Ministry for awarding shelter, food, and medical facilities, clothing etc., to destitute women who are victims of domestic violence or are divorcee or are homeless and also to rape victims. The trust represents them before legal forums, including lodging FIR at police stations against the culprits, The trust also arrange for counselling them through expert counsellors to bring them out of the trauma and help them to lead normal life. These victim women’s are sent by police stations or anybody who knows that women’s are victims of violence.
2.5 Major source of income of the trust is from Government of Maharashtra’s Woman and Child Welfare ministry and also the Central Government and other donations from public. The total funds received from Maharashtra Government and other sources in the financial year 2018-19 are as under:
