Appellate authority upholds GST liability for sale of spiritual products under CGST Act

The appellate authority upheld the advance ruling, determining that the appellant's activities fall within the definition of "business" under Section 2(17) of the CGST Act, 2017. Consequently, the appellant is deemed liable for registration under the CGST Act, 2017, as the sale of spiritual products is considered a taxable supply without qualifying for GST exemptions. The authority dismissed the appellant's arguments based on Supreme Court judgments, emphasizing the applicability of the CGST Act's provisions over those of the BST Act.

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Issues Involved:
1. Whether the activities carried out by the appellant fall under the definition of "business" as defined under Section 2(17) of the CGST Act, 2017.
2. Whether the appellant is liable for registration under the provisions of the CGST Act, 2017 and the MGST Act, 2017.
3. Whether the sale of spiritual products incidental and ancillary to the main charitable object of the appellant can be considered as business under Section 2(17) of the CGST Act, 2017.
4. Whether the appellant's activities are exempt from GST under various notifications.

Issue-wise Detailed Analysis:

1. Definition of Business under Section 2(17) of the CGST Act, 2017:
The appellant, a public charitable and religious trust, contended that its main object is the advancement of religious and spiritual teachings, which does not constitute "business" under Section 2(17) of the CGST Act, 2017. The appellant argued that activities such as selling spiritual products at cost or lower than cost are incidental and ancillary to its main object and should not be considered business. The definition of "business" includes any trade, commerce, manufacture, profession, vocation, adventure, wager, or any similar activity, whether or not it is for pecuniary benefit. The appellant cited Supreme Court judgments to support its claim that activities for advancing charitable purposes do not amount to business.

2. Liability for Registration under CGST Act, 2017:
The appellant argued that since it is not engaged in business, it does not make taxable supplies and hence, is not liable for registration under Section 22(1) of the CGST Act, 2017. Section 22(1) mandates registration for suppliers whose aggregate turnover exceeds twenty lakh rupees. The appellant maintained that its activities do not constitute taxable supplies, and therefore, it is not required to register under the CGST Act, 2017.

3. Sale of Spiritual Products:
The appellant sells spiritual products such as books, audio CDs, DVDs, and statues, which it claims are for the advancement of religious teachings and sold at cost or less than cost. The appellant relied on the Supreme Court judgment in Commissioner of Sales Tax vs. Sai Publication Fund, where it was held that selling publications at cost price for spreading religious messages did not amount to business. The appellant also referred to CIT vs. Gujarat Maritime Board, where ancillary activities incidental to the main charitable object were considered charitable.

4. Exemption from GST:
The appellant argued that certain services provided by charitable trusts are exempt from GST under Notification No. 12/2017. This includes activities related to public health, advancement of religion, spirituality, yoga, and preservation of the environment. The appellant contended that its activities fall under these exemptions and should not be subject to GST.

Discussion and Findings:
The appellate authority concurred with the advance ruling authority that the definition of "business" under the CGST Act is broad enough to include the appellant's activities. The authority noted that the trust's objectives include trade and commerce, such as selling goods and services, which fall under the definition of business. The authority emphasized that the sale of spiritual products is a part of the trust's objectives and constitutes business. The authority also highlighted that specific exemptions are provided for certain charitable activities, but the appellant's activities do not fall under these exemptions.

Conclusion:
The appellate authority upheld the advance ruling, stating that the appellant is engaged in business as defined under Section 2(17) of the CGST Act, 2017, and is liable for registration under the CGST Act, 2017. The sale of spiritual products is considered a taxable supply, and the appellant's activities do not qualify for the exemptions provided under the GST notifications. The authority dismissed the appellant's reliance on Supreme Court judgments, noting that the context and statutory provisions under the CGST Act differ from those under the BST Act.

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