2019 (11) TMI 531 - AAR - GST

Research & Publications Not Qualify for GST Exemption; Clarity Needed for Charitable Activities

The Authority ruled that the international not-for-profit company's research promotion and online journal publication activities do not qualify as ... Charitable activities - exhaustive definition - spreading public awareness - advancement of educational programmes or skill development - advance rulingCharitable activities - exhaustive definition - advancement of educational programmes or skill development - Promotions of research and publishing of online research journals do not fall within the definition of charitable activities for the purposes of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 and the corresponding MPGST notification. - HELD THAT: - The Authority examined the entry in Notification No. 12/2017 and the definition of 'charitable activities' contained therein. The notification lists specific categories of activities that qualify as charitable and the Authority held that this definition is not inclusive but exhaustive. The applicant's stated activities of promotion of research and performing and publishing online research journals do not fall within any of the specified categories (such as care or counselling, spreading public awareness of preventive health/family planning/prevention of HIV, advancement of religion/spirituality/yoga, or advancement of educational programmes or skill development) and therefore are not covered by the exemption at Entry No. 1 of the notification. The Authority applied the determinative interpretative approach that only activities expressly enumerated qualify for the exemption under the notification. [Paras 7, 8]Promotions of research and publishing of online research journals are not entitled to nil-rate GST under the cited notification.Spreading public awareness - advance ruling - Whether organization of seminars, symposiums and conventions by the applicant qualify as 'spreading public awareness' and thereby attract the exemption cannot be determined on the material before the Authority. - HELD THAT: - The Authority observed that organization of seminars, symposiums and conventions may fall within the term 'spreading public awareness' under the notification only if the events are for public awareness of preventive health, family planning or prevention of HIV infection and are open to the public rather than restricted to a select group. Determination of applicability therefore depends on factual inquiries as to the nature and openness of the programmes. In the absence of such factual detail in the application, the Authority held that it is unable to pronounce an advance ruling on those activities. [Paras 7, 8]Advance ruling on organization of seminars/symposiums/conventions is not possible for want of facts; applicability of the exemption requires case-specific factual ascertainment.Final Conclusion: The Authority ruled that the applicant's activities of promotion of research and publishing online research journals do not qualify as 'charitable activities' under Notification No. 12/2017 and are not eligible for nil-rate GST; the question whether the applicant's seminars/symposiums/conventions qualify as 'spreading public awareness' and attract exemption is left undecided for want of requisite factual material and cannot be determined in this advance ruling. Issues:1. Interpretation of charitable activities under Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 for GST exemption.Analysis:The case involves an application filed by an international not-for-profit company engaged in research activities seeking clarification on whether their activities qualify as charitable activities under GST law for exemption. The applicant's activities include promoting research, publishing online research journals, and organizing seminars on various subjects. The main question raised is whether these activities fall under the definition of charitable activities as per the relevant notification, leading to a nil rate of GST.The concerned officer opined that the applicant's activities lack detailed facts, making them ineligible for exemption under the said notification. However, during the personal hearing, the applicant reiterated their activities and highlighted their registration under section 12AA of the Income Tax Act, 1961, which is a prerequisite for charitable activities to be eligible for nil-rated GST.Upon deliberation, the Authority examined the relevant entry in Notification No. 12/2017 - Central Tax (Rate) and its corresponding provision under the MPGST Act. The notification specifies charitable activities, including public health, advancement of religion, educational programs, and environmental preservation, that qualify for exemption. The definition of charitable activities provided in the notification is exclusive, leaving no room for interpretation beyond the specified activities.The Authority concluded that the applicant's activities, such as research promotion and online journal publication, do not align with the charitable activities outlined in the notification. While organizing seminars could potentially qualify as spreading public awareness for exemption, it hinges on whether the programs are open to the public. Without specific details on the nature of the seminars, an advance ruling cannot be issued regarding their exemption status.Therefore, the ruling stated that the applicant's research promotion and journal publication activities do not fall under charitable activities for GST exemption. The decision is subject to the provisions of the GST Act unless declared void under the relevant sections. The ruling emphasizes the need for activities to align with the specified charitable categories to qualify for GST exemption, highlighting the importance of clear delineation in the law for such determinations.