In re Shrimad Rajchandra Adhyatmik Satsang Sadhana Kendra (GST AAR Maharashtra)
Question 1:- Whether the applicant which is a charitable trust with the main object of advancement of religion, spirituality or yoga can be said to be in business so as to attract the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017?
Answer: – Answered in affirmative.
Question 2:- Whether the applicant which is a charitable trust with main object of the advancement of religion, spirituality or yoga is liable to registration under the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017?
Answer: – Answered in affirmative provided that aggregate turnover in a financial year exceeds limit prescribed u/s 22of the GST Act.
Question 3:- Whether sales of spiritual products which is incidental / ancillary to main charitable object of the applicant can be said to be business of the applicant in terms of the definition in Section 2(17) of the Central Goods and Service Tax Act 2017 and option provision of Maharashtra Goods and Service Tax Act 2017?
Answer: – Answered in affirmative.
Question 4:- Whether the sale of spiritual products can be said to be supply under Section 7 of the Central General Sales Tax Act, 2017 and equivalent provision of the Maharashtra Goods and Service Tax Act, 2017 so as to attract GST?
Answer: – Answered in affirmative.
PROCEEDINGS
(under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
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”] by Shrimad Rajchandra Adhyatmik Satsang Sadhana Kendra, the applicant, seeking an advance ruling in respect of the following questions:
1) Whether the applicant which is a charitable trust with the main object of advancement of religion, spirituality or yoga can be said to be in business so as to attract the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017?
2) Whether the applicant which is a charitable trust with main object of the advancement of religion, spirituality or yoga is liable to registration under the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017?
3) Whether sales of spiritual products which is incidental / ancillary to main charitable object of the applicant can be said to be business of the applicant in terms of the definition in Section 2(17) of the Central Goods and Service Tax Act 2017 and option provision of Maharashtra Goods and Service Tax Act 2017?
4) Whether the sale of spiritual products can be said to be supply under Section 7 of the Central General Sales Tax Act, 2017 and equivalent provision of the Maharashtra Goods and Service Tax Act, 2017 so as to Attract GST?
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 such 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, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the “GST Act”.
Also Read AAAR Ruling- GST Payable on Sale of Religious books, DVD & CD by Charitable Trust
02. FACTS AND CONTENTION – AS PER THE APPLICANT
The submissions, as reproduced verbatim, could be seen thus-
Brief Description of Activity carried out by Applicant:
1.1. The Applicant is a religious charitable trust registered under Section 12AA of the Income Tax Act, 1961 carrying out religious and charitable activities.
1.2 The Trust is principally engaged in the field of spreading the knowledge of Jain Dharam and advancement of teachings of Param krupaludev Shrimad Rajchandra. The Trust holds various Satsangs and Shibirs for spreading the knowledge of the Jain Dharam.
1.3. The Trust carries out activities for helping people understand the Jain Dharm and its Philosophy by publications of books and other materials. The trust runs hospitals for giving Medical help to people in general.
Statement of relevant facts having a bearing on the question(s) raised
2. Brief Facts
2.1. Shrimad Rajchandra Adhyatmik Satsang Sadhana Kendra (hereinafter referred to as “applicant’) is a public charitable and religious trust engaged in advancement of the teachings of Paramkrupaludev Shrimad Rajchandra and spreading the knowledge of Jain Religion entrusted by Shri Mahavir Swami and other Tirthankars. The copy of the Trust Deed is annexed herewith as Annexure 4.
2.2. The main object of the applicant trust is to spread the knowledge of the Jain Dharam and advancement of teachings of Param krupaludev Shrimad Rajchandra
2.3. The ancillary and incidental objects of the applicant trust are to carry out activities for advancement of main object such as Satsang, Shibirs, etc. To spread knowledge of the Jain Dharam through publications of books, audio CDS, DVDs, etc. and other materials for students and public in general and to set up organizations for helping people. The ancillary object also includes, protecting birds and animals from being killed in slaughter houses and other activities.
2.4. The applicant was registered under the erstwhile Maharashtra Value Added Tax Act, 2002 in view of the specific Explanation in the definition of “dealer” under Section 2(8) of the MVAT Act, 2002.
2.5. With effect from 1.7.2017, the Goods and Service Tax was brought into force and the existing registered dealers under the erstwhile MVAT Act, 2002 were migrated to GST. In reparation for implementing GST, the Commissioner of Sales Tax, Maharashtra issued Circular No. 35T of 2016 dated 12.11.2016 mandatorily requiring the existing registered dealers under the provisions of MVAT Act, 2002 to enroll themselves for GSTIN.
2.7. Thus, the applicant was also migrated to the GST and Registration Certificate was issued to applicant on 22-09-2018 in Form GST REG_06. Copy of the Registration Certificate is annexed herewith as Annexure- 5.
2.8. Though the applicant has been registered under GST, the applicant has not filed any returns since the applicant is not engaged in any business transactions amounting to supply liable to GST.
Statement containing the applicant’s interpretation of law and or facts as the case may be, in respect of the
aforesaid question(s)
1. The Applicant is not carrvine on business in terms of Section 2(17) of the CGST Act, 2017
1.1. The Applicant submits that the Applicant is not engaged in any of the business activity’ as defined under the Section 2(17) of the CGST Act, 2017.
1.2. The said Section 2(17) is reproduced below for ready reference:
(17) “Business” includes
(a) Any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit:
(b) An activity or transaction in connection with or incidental or ancillary in sub-clause (a);
(c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction;
(d) Supply or acquisition of goods including capital goods and sendees in connection with commencement or closure of business;
(e) Provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members;
(f) Admission, for a consideration, of persons to any premises;
(g) Services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation:
(h) Sendees provided by a race club by way of totalisator or a licence to book maker in such club; and
(i) An activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged us public authorities;
1.3. The applicant submits that, the business definition is an inclusive definition and has various specific clauses to be included in the definition of business.
1.4. The main clauses relevant for the present application are as Clause (a) and Clause (b). The applicant submits that other clauses are not applicable in the facts of the present case.
1.5. Clause (a) provides that any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit shall be included in the definition of business.
1.6. The applicant submits that in the present case, the applicant is a public charitable trust with the main object of advancement of religious and spiritual teachings and not engaged in any trade, commerce, manufacture, profession, vocation adventure, wager or any other similar activity. Further, the applicant does not get any pecuniary benefit from various activities carried out by the applicant in , under the main object of spreading religious and spiritual teachings.
1.7 It is settled law that where the public charitable trust carries out activity for advancement of its main object of charitable purpose, the same cannot be said to be business in commercial sense as defined in the taxing Statute. There is no motive to earn profit out of the said activities and profit earned if any is spent on the advancement of the general public utility and hence, there cannot be said to be any business which is carried out by the Public Charitable Trust.
1.8 Thus, in the present case also, the main object of the applicant being advancement of the religious and spiritual teachings Paramkrupalu Shimad Rajchandra, the applicant cannot be said to be carrying out business as defined in Section 2(17) of the CGST Act, 2017,
2. Once the main object of the applicant cannot be considered as business, the ancillary or incidental objects also cannot be considered as business.
2.1 The applicant submits that, once the main object of the applicant cannot be considered as business, the ancillary or incidental objects also cannot be considered as business.
2.1 The applicants submits that, it sells various spiritual products (Annexure – 6) such as Books, Audio CDs, DVDs, Statues, Calendars which are for the advancement of the religious teachings of the Paramkrupalu Shrimad Rajchandra. The said books give in-depth study of the teachings of Gurudev and are only for spreading the religious message. The DVDs and CDs are recorded pravachan, Satsang. Spiritual songs and bhajans for those who cannot be personally present at the events. The calendars again are used for providing information of the religious days and religious sayings.
2.3 The applicant further submits that, the money earned from selling the above publications are used for main object only which is charitable and religious purpose.
