The Maharashtra Appellate Authority for Advance Ruling (AAAR) has ruled that the amount collected as membership subscription and admission fees by Rotary Club from its members does not attract Goods and Services Tax (GST) as a supply of service.
This decision was made in an appeal filed by the Rotary Club of Mumbai Queens Necklace against the decision of the Maharashtra Authority for Advance Ruling (AAR) which classified the functioning of the Rotary Club as that of any other club registered under the GST regime.
The appellant was able to convince the appellate authority that their functions include, promotion of peace, fighting diseases, providing clean water, sanitation and hygiene, protection of mothers and children, support of education and not the provision of services and goods such as recreation, sports which other clubs provide in normal parlance. The amount collected from members as subscription and admission fees are strictly utilized for the administration purposes, meeting expenses, banquet expenses, catering expenses and printing and stationery expenses of the club.
The Appellate Authority benched by Rajiv Jalota and Sungita Sharma held that since it is not being established as the Appellant is doing any business in terms of section 2(17) of the CGST Act, 2017, it can be deduced that activities carried out by the appellant would not come under the scope of supply as envisaged under section 7(1) of the CGST Act, 2017.
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