2021 (1) TMI 494 - AAR - GST

Community Science Center's GST Liability and Registration Requirement

The case involved determining the applicability of GST on activities conducted by a community science center and the requirement of GST registration for ... Levy of GST - Service of catalyst to facilitate development of scientific temper among students - requirement of GST registration - Educational institute or not - applicant, therefore, requested to consider science education imparted by Community Science Centres as an integral and important support to formal education system in raising the quality of science education and include it in the definition of ‘education institute’ - HELD THAT:- Vikram A Sarabhai Community Science Centre was established by India’s renowned Scientist, Dr. Vikram Sarabhai in 1966 to take students, from both school and college, out of the rigid framework of textbook and encourage them to think, explore and crate. It is a pioneering community science centre, conducting innovative programmes for improving quality of science education, its popularization and building scientific temper. It is found that the none of the activities carried out by the applicant as mentioned, is covered under the scope of “Educational Institution” is defined in para 2(y) of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, and, hence, the admittedly, the applicant does not fall under the definition of “educational institution” - It is further worthwhile to mention here that the advance ruling authority is not the Legislature to amend the GST law, but it concise with law. Hence, it is not the authority to consider science education imparted by Community Science Centres as an integral and important support to formal education system in raising the quality of science education and include it in the definition of ‘educational institution’ - thus it can be safely concluded that the applicant is not at all entitled for exemption in respect of any activity undertaken by them under Entry at Sr. No. 66 of the exemption Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, as amended. Requirement of Registration Certificate u/s 23(2) of the Goods and Service Tax Act - applicability of exemption Notification No.12/2017-State Tax dated the 30th June, 2017 - HELD THAT:- This notification makes the exemption to charitable trusts available only in respect of charitable activities. While the income from only those activities listed above is exempt from GST, income from the activities other than those mentioned above is taxable. Thus, there could be many services provided by charitable and religious trust, which are not considered as charitable activities and hence, such services come under the purview of GST - Further, if trusts are running schools, colleges or any other educational institutions specifically for abandoned, orphans, homeless children, physically or mentally abused persons, prisoners or persons over age of 65 years or above residing in a rural area, such activities will only be considered as charitable activities and income from such supplies will be wholly exempted from GST - Thus, services provided by way of training or coaching in recreational activities relating to arts or culture or sports by a charitable entity will be exempt from GST. The applicant is not entitled for exemption in respect of any activity undertaken by them, under the said Entry Nos. 1, 13 & 80 of the of the exemption Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, as amended, granting exemption to an entity registered under Section 12AA of the Income Tax Act, 1961. Thus, the applicant is liable to pay GST on all the activities carried out by the applicant as mentioned in foregoing para and, consequently, required to obtain GST registration for said taxable services provided by them. Issues Involved:1. Applicability of GST on activities carried out by the applicant.2. Requirement of GST registration for the applicant.Issue-Wise Detailed Analysis:Issue 1: Applicability of GST on ActivitiesDiscussion & Findings:- The applicant, a community science center, aims to improve science education and build scientific temper through various activities such as hands-on programs, mobile exhibitions, science playgrounds, and workshops.- The applicant argued that their activities complement formal education and should be considered as an educational institution under Notification No. 25/2012-Service Tax.- The authority examined Entry No. 66 of the exemption Notification No.12/2017-Central Tax (Rate), which exempts services provided by an educational institution to its students, faculty, and staff.- The term 'educational institution' is defined to include pre-school education, education up to higher secondary school, education as part of a curriculum for obtaining a qualification recognized by law, and approved vocational education courses.- The authority concluded that the applicant does not fall under the definition of an 'educational institution' as none of their activities are covered under the exempted services defined in the notification.- The applicant's request to consider their activities as an integral part of formal education and include them in the definition of 'educational institution' was not accepted as the authority cannot amend the GST law.Conclusion:- The applicant is not entitled to exemption under Entry No. 66 of the exemption Notification No.12/2017-Central Tax (Rate) for any of their activities.Issue 2: Requirement of GST RegistrationDiscussion & Findings:- The applicant is registered as a 'Charitable Education Trust' under Section 12AA of the Income Tax Act, 1961, and argued that their activities should be exempt under Entry Nos.1 and 66 of the exemption Notification No.12/2017-State Tax.- Entry No.1 of the Notification No.12/2017-Central Tax (Rate) exempts services by entities registered under Section 12AA of the Income-tax Act by way of charitable activities.- The term 'charitable activities' is defined to include public health, advancement of religion, spirituality or yoga, educational programs or skill development for specific groups, and preservation of the environment.- The authority noted that the applicant's activities do not fall under the defined 'charitable activities' and hence are not exempt from GST.- Additional entries (Nos. 13 and 80) in the notification provide exemptions for specific services by charitable entities, but the applicant's activities do not qualify under these exemptions either.Conclusion:- The applicant is liable to pay GST on all their activities and is required to obtain GST registration.Ruling:Question 1: Whether GST is applicable on any of the activities carried on by the applicantRs.- Answer: Yes, GST is applicable.Question 2: Whether GST registration is required or notRs.- Answer: Yes, GST registration is required.