Charitable Activities not Amount to ‘Supply’: Reimbursement by Maharashtra Govt to Trust for One Stop Crises Centre Scheme not Subject to GST, rules AAAR [Read Order]

The Maharastra Appellate Authority For Advance Ruling For Goods And Services Tax, ( AAAR), has recently, while deciding an appeal filed before it by an appellant, held that charitable activities not being "supply" u/s 7(1)(a), reimbursement amount paid by Maharashtra Govt to the Appellant for one stop crises centre scheme cannot be subjected to GST levy. The aforesaid observation was made by the Authority when an appeal was filed before it under Section 100 ofthe Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017, by M/s. Jayshankar Gram in and Adivasi Vikas Sanstha, against the Advance Ruling No. GST-ARA-97/2019-20/B-91 dated 10.11.2021, pronounced by the Maharashtra Authority for Advance Ruling (MAAR). The Appellant being a charitable trust registered under the Maharashtra Public Charitable Trust Act, 1950 and also under Section 12AA of the Income Tax Act. 1961 w.e.f. 08.10.2009, was undertaking services to orphans and homeless children, by way of providing shelter, education, guidance, clothing, food and health, on behalf of the Women & Child Development Ministry of The Government of Maharashtra. The trust being involved in rendering services to destitute women who are litigating divorce, or are homeless, or the victims of domestic violence etc., under the "One stop crises centre" scheme (Subject matter in Advance Ruling) ,introduced by The Ministry of Women and Child Development, was receiving grants from the Central Govt. for these services, following which it was also selected as an implementation agency vide “Aadesh ‘’bearing number 686/19-20 dated 28.05.2019, under the aforesaid scheme. Further, a grant of amount up to Rs. 2.00,000/- per month was approved under the said scheme wherein the trust was to only act as an implementing agency and to use grant amount in specified manner. With the Appellant beingunsure of the GST applicability of the said"One Stop Crises Centre", an application was made by it with the Authority of Advance Ruling for the GST, Maharashtra (MAAR) for the purpose of ensuring as to whether the aforementioned transactions are liable to GST or not. However, with the MAAR passing an order bearing No.GST-ARA-97/2019-20/B-9I dated I 0.11.2021 confirming the GST applicability on the impugned transactions, the appellant was forced with no other option than to prefer the present appeal before the Maharashtra Appellate Authority for Advance Ruling for Goods and Services Tax (MAAAR). Hearing the contentions raised as well as perusing the materials on record, the MAAAR observed: “In the absence of any consideration, it is opined that the subject transactions/activities undertaken by the Appellant, wherein they are providing various assistances, such as food, shelter, legal assistances, medical assistances, etc. to the destitute women, would not be construed as supply in terms of Section 7(1)(a) ofthe CGST Act, 2017, which stipulates that for any transactions/activities to be considered as supply, there has to be an element of "consideration. In absence of the same, such transactions/activities will not be considered as "supply"”. “And since it has been established that the subject activities undertaken by the Appellant will not be construed as supply in terms of section 7(I)(a) of the CGST Act, 2017, we will not proceed to examine the third moot issue as to whether the impugned activities undertaken the Appellant can be construed a charitable activities in terms ofthe clause (r) ofthe definition section ofthe Notification No.I 2/20 17-C.T. (Rate) dated 28.06.20 I 7 as the determination of the same will have no bearing on the applicability of GST on the impugned transactions/activities”, the Authority added. Thus, setting aside the Ruling passed by the MAAR vide Order No. GST-ARA-97/2019-20/B-91 dated 10.11.2021, it held: “Since the impugned activities undertaken by the Appellant are not construed as "supply" in terms of section 7(I)(a) of the CGST Act. 20 I7. the reimbursement amount paid by the Maharashtra Government to the Appellant for undertaking the activities specified under "One stop Crises Centre Scheme" floated by the Central Government, will not be subject to the levy of GST. Thus. the Appeal filed by the Appellant stands disposed of in above terms.” Support our journalism by subscribing to TaxscanPremium. Follow us on Telegram for quick updates.

Charitable Activities not Amount to ‘Supply’: Reimbursement by Maharashtra Govt to Trust for One Stop Crises Centre Scheme not Subject to GST, rules AAAR [Read Order]

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Topics

Charitable Activities not Amount to ‘Supply’: Reimbursement by Maharashtra Govt to Trust for One Stop Crises Centre Scheme not Subject to GST, rules AAAR [Read Order]

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Sign-up to receive exclusive news and promotions straight to your inbox!

Topics