GST on Donation

[Ethirajan Parthasarathy]

Donations received by NGOs without any condition attached, should not attract GST since NGO does not render any “supply” to the Donar.

But there is a view that the above interpretation, is negated by the decision of AAR Maharashtra in the case of Shrimad Raj Chandra Adhyatmik Satsang Sadhana Kendra.

Experts view on the above is solicited.

[KASTURI SETHI]

Applicability of GST on donation depends upon so many factors. So it is case to case. Read the following :

GST on Charitable and Religious Trusts - C.B.E. & C. Flyer No. 39, dated 1-1-2018

 

[KASTURI SETHI]

Dear Querist,

In the judgement mentioned by you, the Religious Institution/Trust is engaged in the Commercial Activity also. The decision of AAR, Maharashtra is very much clear with evidence.

[Yash Jain]

Dear Sir,

The Question framed is not in line with Judgement.

In judgement it is stated that Commerical Activites as being undertaken by Trust is Subject to GST and is payable. The had raised 4 Question (Refer the Last page of the Order, and in none of the Question is the word “Donation”)

As for donation, it is giving / offering without expecting anything in return. So the question of having GST on Donation prima facie will not arise, as donation is not against any “Supply” and nor is it a “Consideration”

Regards

[DR.MARIAPPAN GOVINDARAJAN]

I concur with the views of Shri Yash.

AI Summary

GST on donations: unconditional donations are generally not taxable, but receipts tied to commercial activity may attract tax.
Applicability of GST to donations depends on whether the receipt is a supply or consideration. Unconditional donations without expectation of return are prima facie not supplies and generally outside GST. Where a trust or institution engages in commercial activity, receipts linked to those activities may be taxable. The question is fact-specific and requires case-by-case assessment, informed by administrative guidance and advance rulings distinguishing charitable donations from commercial receipts.