Charitable environmental afforestation qualifies for GST exemption and does not trigger registration when not run as business.

Mangrove plantation and afforestation undertaken by a registered charitable trust were treated as charitable environmental activity because they fell within preservation of environment under the exemption definition, and the activity was therefore exempt under Notification No. 12/2017-Central Tax (Rate). The authority also found that the project was not carried on as trade, commerce or profit-oriented business, and the funds were to be used for implementation of the plantation project. As there was no business activity in the course or furtherance of trade or commerce, the activity did not constitute taxable supply for GST registration purposes, subject to the stated exemption conditions being satisfied.

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Issues: (i) Whether afforestation activity, including mangrove plantation, carried out by the applicant is covered as a charitable activity and exempt under Sr. No. 1 of Notification No. 12/2017-Central Tax (Rate). (ii) Whether the activity amounts to a supply in the course or furtherance of business so as to require GST registration under Section 22(1) of the Central Goods and Services Tax Act, 2017.

Issue (i): Whether afforestation activity, including mangrove plantation, carried out by the applicant is covered as a charitable activity and exempt under Sr. No. 1 of Notification No. 12/2017-Central Tax (Rate).

Analysis: The applicant is registered as a charitable trust under Section 12AA of the Income-tax Act, 1961. The activity undertaken is mangrove plantation along the coastal belt, which was found to have direct environmental benefits such as protection against erosion, storm surges, salinity ingress and carbon absorption. Clause 2(r) of the exemption notification defines charitable activities to include preservation of environment including watershed, forests and wildlife. On the facts of the project and the nature of the activity, the plantation work falls within that definition.

Conclusion: Yes. The afforestation and mangrove plantation activity is covered as a charitable activity and is exempt under Sr. No. 1 of Notification No. 12/2017-Central Tax (Rate).

Issue (ii): Whether the activity amounts to a supply in the course or furtherance of business so as to require GST registration under Section 22(1) of the Central Goods and Services Tax Act, 2017.

Analysis: A supply under Section 7(1) arises only when there is a consideration in the course or furtherance of business. The authority found that the applicant was not engaged in trade, commerce or any profit-oriented business and that the funds received were to be fully deployed for the plantation project and related implementation costs. Since the activity was held not to be a business activity, it did not amount to taxable supply for GST registration purposes.

Conclusion: No. The applicant is not required to obtain GST registration on the basis of the impugned activity, provided the stated conditions for exemption are satisfied.

Final Conclusion: The ruling grants GST exemption to the mangrove afforestation project as a charitable environmental activity and holds that the applicant is not liable for GST registration on that basis.

Ratio Decidendi: Environmental afforestation activity undertaken by a registered charitable trust falls within charitable activities when it is directed to preservation of environment and is not carried on as a business for consideration in the course or furtherance of trade or commerce.

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