Charitable tree plantation for environmental preservation qualifies for GST exemption under the charitable activities entry.

Services supplied by a charitable institution registered under section 12AB for plantation and maintenance of trees can qualify as charitable activities when undertaken for environmental preservation. Because the activity involved planting and maintaining trees on barren land, roadsides, lane dividers, private lands and similar areas for sustainable preservation, it was treated as falling within the exemption for services by an eligible charitable entity under Notification No. 12/2017-Central Tax (Rate). The result was that the activity was held exempt from GST.

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Issues: Whether the activity of plantation and maintenance of trees by a charitable institution registered under the Income-tax Act, 1961 falls within Entry No. 1 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 so as to be exempt from GST.

Analysis: Entry No. 1 of Notification No. 12/2017-Central Tax (Rate) grants nil rate to services provided by an entity registered under section 12AA or 12AB of the Income-tax Act, 1961 by way of charitable activities. The notification defines charitable activities to include activities relating to preservation of environment, including watershed, forests and wildlife. The applicant was found to be registered under section 12AB of the Income-tax Act, 1961, and its proposed activity consisted of planting and maintaining trees in non-forest areas such as barren lands, roadsides, lane dividers, private lands, and other available patches of land for sustainable preservation. This activity was held to align with environmental preservation and the objectives of the National Forest Policy, 1988. The ruling also followed the view that similar tree plantation and maintenance activities fall within the same exemption entry.

Conclusion: The activity is covered by Entry No. 1 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and is exempt from GST.

Ratio Decidendi: Services rendered by a duly registered charitable institution for plantation and maintenance of trees, when undertaken for environmental preservation, constitute charitable activities covered by the GST exemption entry for such services.

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