Service Tax on NGO - Lenting out Immovable property by NGO to NGO

[Guest]

As per Service Tax Laws (Notification No. 25/2012) if one is registered with income tax authorities for this purpose under section 12AA the Income Tax Act, 1961 and carry out one or more of the specified charitable activities, the NGO shall be exempted from service tax.

My question is that most of NGOs do many types of activities - few covered here (as charitable activities in service tax law) and few others. if few activities (not all) done by NGO are charitable activities as defined in service tax act, whether NGO would be exempted from service tax provisions. If yes, whether all activities (including commercial and those activities not defined as charitable activities here) are exempted from service tax?

My next question is about lent out of office premises by a NGO (engaged in health and many other activities) to another NGO (engaged by education and food supplement). Whether this lent out would be exempted from service tax as owner NGO is engaged in public health awareness (which is a charitable activities here)?

AI Summary

NGOs Partially Engaged in Non-Charitable Activities May Face Service Tax; Renting Offices Not Exempt Under Finance Act 1994. An individual inquired about the service tax implications for NGOs, specifically when an NGO engages in both charitable and non-charitable activities. They questioned whether an NGO would be exempt from service tax if only some of its activities are classified as charitable under the Service Tax Laws. Additionally, they sought clarification on whether renting out office premises by one NGO to another would be exempt from service tax if the owner NGO is involved in public health awareness, a recognized charitable activity. A consultant responded, stating that service tax applies to activities not explicitly defined as charitable under the Finance Act 1994.