Charitable trust's paid spiritual activities including accommodation and food services constitute business under Section 2(17) CGST Act requiring GST registration

The AAR Maharashtra ruled that a charitable trust engaged in advancement of religion, spirituality or yoga constitutes "business" under GST Acts despite its charitable status. The trust's activities including sale of spiritual products, providing accommodation and food during paid Shibir/Satsang programs, and charging participants fees fall within the definition of "business" under Section 2(17) CGST Act and constitute "supply" under Section 7. The authority held that only free Satsang activities qualify as charitable, while paid services do not meet the charitable activities definition under GST notifications. Consequently, the trust is liable for GST registration and tax on its commercial activities.

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Issues Involved:
1. Determination of whether a charitable trust engaged in the advancement of religion, spirituality, or yoga can be considered as conducting business under the GST Act.
2. Liability of the charitable trust to register under the GST Act.
3. Classification of the sale of spiritual products as a business activity under the GST Act.
4. Determination of whether the sale of spiritual products constitutes a supply under the GST Act, thereby attracting GST.

Issue-Wise Detailed Analysis:

1. Charitable Trust as Business:
The applicant, a religious charitable trust, contended that its primary objective is the advancement of religion and spirituality, not business. The trust argued that activities such as selling spiritual products are incidental to its main charitable objectives and do not constitute business as defined under Section 2(17) of the CGST Act, 2017. However, the judgment clarified that the definition of "business" under the GST Act includes any trade, commerce, or similar activity, irrespective of profit motives. The trust's activities, including the sale of spiritual products, were deemed to fall under this definition, thereby classifying the trust as engaging in business.

2. Liability to Register under GST:
The trust argued against the necessity for GST registration, asserting that it does not engage in taxable business activities. The judgment, however, noted that the trust's aggregate turnover from the sale of goods and services, including accommodation and food provided during Shibirs/Satsangs, exceeded the prescribed threshold under Section 22 of the GST Act. Consequently, the trust was held liable to register under the GST Act, provided its aggregate turnover in a financial year surpasses the specified limit.

3. Sale of Spiritual Products as Business:
The trust maintained that selling spiritual products like books, CDs, and DVDs is ancillary to its main charitable purpose and should not be classified as business. The judgment referred to the inclusive definition of "business" under Section 2(17) of the GST Act, which encompasses ancillary activities. The sale of spiritual products was determined to be incidental to the trust's primary objectives but still constituted business activities under the GST Act.

4. Sale of Spiritual Products as Supply:
The trust argued that its activities do not amount to "supply" under Section 7 of the GST Act, which defines supply as transactions made in the course or furtherance of business. The judgment concluded that the sale of spiritual products by the trust qualifies as "supply" under the GST Act, as these transactions are conducted in the course or furtherance of business. Therefore, such sales attract GST.

Conclusion:
The judgment affirmed that the charitable trust's activities, including the sale of spiritual products and provision of accommodation and food during events, constitute business under the GST Act. The trust is liable to register under the GST Act if its aggregate turnover exceeds the prescribed limit. The sale of spiritual products is considered a supply, attracting GST. The judgment was delivered collectively without separate opinions from individual judges.

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