Amount Pooled by Clubs to Meet Expenses other than Administrative Expenses liable to GST: AAR [Read Order]

The Maharashtra Bench of the Authority of Advance Ruling ( AAR ) in an application filed by Rotary Club of Mumbai Western Elite held that only membership fees received from members of the club shall be exempt making other collections (except for meeting administrative expenses) liable to GST.

Rotary Club (registered under the GST law) is a part of Rotary International and receives fees from its members to defray its expenditure on meetings and communication, subscription fees, etc.

The applicant sought the ruling of the present authority on whether the amount collected from the members can be considered as supply of goods or services under GST?

It has been submitted by the applicant that the members of the applicant are not entitled to any facilities whatsoever such as sports, fitness, lifestyle, entertainment and personal transportation. The training programs conducted by the applicant for the benefit of members are also collected separately from the members and accounted accordingly. Further, the membership fees collected from the members is towards meeting expenses, administrative expenses and charitable activities.

The Bench constituting of Shri B. Timothhy and Shri A.A. Chahure held that the amount collected by Rotary Club to its members constitutes supply under GST. The said amount is paid towards the convenience of members and pooled together for paying meeting expenses, communication expenses, RI per capital dues, subscription fees to the Rotarian or Rotary regional magazine, district per capita assessment and the same is deposited in a single bank account.

Further, only the membership fees recovered by the applicant from their members shall be exempted from GST. Hence, Expenses other than administrative expenses, collected towards the convenience of members and pooled together for paying various expenses are leviable to GST.