The provisions related to Charitable and religious trusts under GST has been carried forward from service tax provisions.

Notification 12/2017-Central tax (Rate) specified that the exempt services supplied by the Charitable trusts along with some conditions which are explained below:

♣ If the entities is registered under Section 12AA of the Income tax Act, and

♣They are supplying the Charitable services as specified in the notification

♣Following are the Charitable activities which is specified in the above said notification:

(i) public health by way of,-

(A) care or counseling of

(I) terminally ill persons or persons with severe physical or mental disability;

(II) persons afflicted with HIV or AIDS;

(III) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or

(B) public awareness of preventive health, family planning or prevention of HIV infection;

(ii) advancement of religion, spirituality or yoga;

(iii) advancement of educational programmes or skill development relating to,-

(A) abandoned, orphaned or homeless children;

(B) physically or mentally abused and traumatized persons;

(C) prisoners; or

(D) persons over the age of 65 years residing in a rural area;

(iv) preservation of environment including watershed, forests and wildlife;

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♣If the charitable trusts is giving services apart from above activities like giving transportation services, giving a person advertising rights for promotion on the premises of charitable or religious trusts, giving rights to arrange events, celebrations, shows against admission fee or ticket, then gst will be charged.

♣ Above mentioned notification also exempt the following services also but subject to some conditions:

  • Conduct of any religious ceremony, no amount limit applicable on religious ceremony.
  • Renting of premises of charitable trusts or religious trusts which is meant for general public and which is owned and managed by the charitable trusts which is registered under section 12AA of the income tax act, but subject to some conditions like

The exemption will be revoke and GST will be leivable If:

1. Rooms are giving on rent of Rs 1000 or more per day

2. Renting of premises, community halls, kalyanmandapan or open area and charges 10,000 or more per day.

3. Renting of shops or other spaces for business and charges 10,000 or more per month.

  • If donation is received by the charitable trusts or religious trusts in the form of supply of goods or services and the donor giving direction to the charitable trust about his promotions, then GST will be lievable. If donation is received without any direction or without a quid pro quo, it shall not be subject to GST.
  • Services provided by way of training or coaching in recreational activities relating to arts or culture or sports by Charitable Entity is exempt from GST.
  • Education facility run by the Charitable entity in the rural for abandoned, orphans, homeless, children, physically or mentally abused, prisoners or person of having age 65 yrs or above is exempt from GST.
  • Any services received by the charitable entity from outside India are exempt from GST, if these services have been taken for charitable activities. So no GST on import on services under Reverse charge has been levied.
  • Services given by the charitable trust to the students, staff and faculty of the specified educational institute is exempt from GST. Likewise, services supplied to these specified educational institute is also exempt from GST like transportation services to staff, students and faculty, catering services, security or cleaning or house-keeping services, conduct of examination, services relating to admission. Other Services like renting of book shops, canteen etc is GST Chargeable.
  • Religious Yatra conducted by Charitable or Religious Trust are not exempt from GST unless it is conducted by Kumaon Mandal Vikas Nigam Ltd., Haj Committee of India or a State Haj Committee constituted under the Haj Committee Act,2002.
  • Healthcare services and Ambulance Services provided by the Charitable trust or religious Trust is exempt from GST if they the doctors is giving treatement of diagnosis, care for illness, injury, deformity, abnormality or pregnancy but does not include hair transplant, cosmetic, plastic surgery except when undertaken to restore or to reconstruct anatomy or function of the body affected due to congenital defects, injury or trauma.
  • Supply of food and beverages to the patients is also not taxable. Food supplies to attendant or visitors is taxable. All other services other than mentioned above related to health care services is taxable in GST.

In case you need any legal assistance or legal advice, you may contact us at [email protected]

This article is written by Rahul Grover, who is the Managing Partner of Raag Consultants.

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February 2021