Charitable activity exemption under GST turns on strict fit with notified entries and valid registration or government funding

Exemption under Notification No. 12/2017-Central Tax (Rate) was allowed only where the activity squarely fit a notified charitable entry or was supplied under a government-funded training programme. The Gujarat AAR held that National Mental Health Programme services, yoga camps, de-addiction seminars, and cleaning and sanitation training were exempt under Entry 1, subject to valid section 12AB registration where required. Self-defence training for women, PM Vishwakarma-related goldsmith training, and vocational training at Kasturba Gandhi Balika Vidyalay were exempt under Entry 72. Seminars for women's development were not exempt, and blood donation camps and road safety training were also held not exempt.

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Issues: (i) whether services under the National Mental Health Programme were exempt as charitable activities under Entry No. 1; (ii) whether self-defence training for women and training under the Suraksha Setu and education department programmes were exempt under Entry No. 72; (iii) whether training to goldsmiths under the Gujarat Matikaam Kalakari and Rural Technology Institute and PM Vishwakarma related training were exempt under Entry No. 72; (iv) whether vocational training at Kasturba Gandhi Balika Vidyalay was exempt under Entry No. 72; (v) whether seminars for development of women were exempt under Entries No. 71 or 72; (vi) whether yoga camps were exempt under Entry No. 1; and (vii) whether de-addiction seminars and training for cleaning and sanitation were exempt under Entry No. 1, and whether blood donation camps and road safety training were exempt.

Issue (i): whether services under the National Mental Health Programme were exempt as charitable activities under Entry No. 1.

Analysis: The applicant was registered under section 12AB of the Income-tax Act, 1961, and the work order related to mental health awareness, education and training activities for vulnerable persons. The definition of charitable activities in the notification includes public health awareness and advancement of educational programmes or skill development relating to physically or mentally abused and traumatized persons.

Conclusion: The services under the National Mental Health Programme were held exempt under Entry No. 1, subject to possession of valid section 12AB registration.

Issue (ii): whether self-defence training for women and training under the Suraksha Setu and education department programmes were exempt under Entry No. 72.

Analysis: The work orders were issued by police authorities and government educational offices, and the training was funded from government sources. The services were provided to government departments or government-run schools under training programmes where the expenditure was borne by the State Government.

Conclusion: The self-defence training services were held exempt under Entry No. 72.

Issue (iii): whether training to goldsmiths under the Gujarat Matikaam Kalakari and Rural Technology Institute and PM Vishwakarma related training were exempt under Entry No. 72.

Analysis: The training was found to be part of the PM Vishwakarma Scheme, a fully Central Government funded scheme, and the applicant had been designated to conduct artisan mobilization and basic training for the relevant trade beneficiaries.

Conclusion: The training to goldsmiths and related PM Vishwakarma training were held exempt under Entry No. 72.

Issue (iv): whether vocational training at Kasturba Gandhi Balika Vidyalay was exempt under Entry No. 72.

Analysis: The training was provided under work orders issued by the school authorities in a government-supported school scheme, and the expenditure was borne through government support.

Conclusion: The vocational training at Kasturba Gandhi Balika Vidyalay was held exempt under Entry No. 72.

Issue (v): whether seminars for development of women were exempt under Entries No. 71 or 72.

Analysis: The applicant was not registered as a project implementation agency under the relevant skill development scheme, and the factual record was insufficient to bring the activity within the claimed entries.

Conclusion: The claim for exemption for seminars for development of women was rejected.

Issue (vi): whether yoga camps were exempt under Entry No. 1.

Analysis: Yoga falls within the notified charitable activity of advancement of religion, spirituality or yoga, and the applicant satisfied the charitable registration requirement, subject to valid section 12AB registration.

Conclusion: The yoga camp services were held exempt under Entry No. 1, subject to possession of valid section 12AB registration.

Issue (vii): whether de-addiction seminars and training for cleaning and sanitation were exempt under Entry No. 1, and whether blood donation camps and road safety training were exempt.

Analysis: De-addiction seminars and cleaning and sanitation training were treated as public awareness of preventive health and therefore within charitable activities. Blood donation camps were held to be primarily for collection and supply of blood, with only ancillary screening measures, and road safety training was held not to amount to preventive health for the purpose of the notification.

Conclusion: De-addiction seminars and cleaning and sanitation training were held exempt under Entry No. 1, while blood donation camps and road safety training were held not exempt.

Final Conclusion: The ruling granted exemption for the identified charitable and government-funded training activities, but denied exemption for the women development seminar, blood donation camps and road safety training, and declined to answer the alternative and unsupported questions.

Ratio Decidendi: Exemption under Notification No. 12/2017-Central Tax (Rate) depends on the activity falling squarely within the notified entry and, where required, on the applicant's valid charitable registration or proof that the service is supplied under a government-funded training programme.

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