The West Bengal Authority of Advance Ruling (AAR) ruled that a charitable trust providing legal, medical, psychological and financial support to the women and their children surviving violence and abuse do not amount to ‘supply’ of service, neither is it a recipient of the services, so the applicant is not liable to pay GST.
The applicant, M/s Swayam is a charitable trust registered under section 12A of the Income Tax Act, 1961. It extends legal, medical, psychological, and financial support to the women and their children surviving violence and abuse. The applicant also facilitates training programs and workshops for the survivors.
The applicant sought the advance ruling on the issue of whether it is liable to pay tax on its activities for extending legal, medical, psychological, and financial support to the women and their children surviving violence and abuse.
The authority consisting of members Susmita Bhattacharya and Parthsarthi Dey ruled that a charitable trust providing legal, medical, psychological and financial support to the women and their children surviving violence and abuse do not amount to ‘supply’ of service, neither is it a recipient of the services, so the applicant is not liable to pay GST.
“The applicant is apparently assisting the women survivors in various ways to get back on their feet. Such survivors of sexual and other violence need services like legal aid, medical assistance, and vocational training. The recipient of such services is, therefore, not the applicant but the survivor woman. The applicant makes payments not to the supplier of the services, but as financial support in the form of reimbursement to the recipient survivor. It is, therefore, not liable to pay GST based on reverse charge mechanism on such payments,” the AAR noted.
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