Service Tax on NGOs

[Sunil Kumar]

Dear Sir,

Is service tax applicable on NGOs?

Apparently, it appears that service tax is applicable on NGO except those NGOs covered under mega exemption ST 25/2012.

But if we refer F.No.354/119/2010-TRU dated 16th August 2010, we find that service tax is not applicable to NGOs on broad terms.

My query is:

1. Is service tax applicable to NGOs?

2. If service tax applicable to NGO if NGO is complying branding and marking guidelines of the donor. The branding and marking guidelines of the donor requires strict compliance of the guidelines which includes putting logo and name of the donor on all equipment, banners, reports, etc. generated under the grant fund.Is is not advertising services.

3. With reference to notification no. 25/2012, what is the coverage of the term public health?

Regards,

Sunil Kumar, FCA

AI Summary

Service Tax Exemption for NGOs: Clarification on Applicability and Importance of Registration under Section 12AA A query was raised about the applicability of service tax on NGOs, especially those adhering to donor branding guidelines. It was clarified that service tax is generally not applicable to NGOs unless there is a direct link between the grant and a taxable service. Specific exemptions exist under Notification No. 25/2012 for NGOs engaged in charitable activities, such as public health, education, and environmental preservation. If an NGO's activities fall under these categories and meet certain conditions, they are exempt from service tax. The discussion also highlighted the importance of registration under section 12AA of the Income Tax Act for such exemptions.