GST on CSR funds received.

[Vijay Kumar]

Respected experts, One of my client regd under GST under service provider category issued non GST invoice ( without GST) for CSR funds received from a trust. Is there any exemption available for Such funds recd from paying GST ? Trust from whom CSR funds recd is not willing to pay GST. Kindly guide me., I shall be highly thankful.

[DR.MARIAPPAN GOVINDARAJAN]

In my view no exemption is available.

[CA Hemanth Kumar]

Dear Sir,

No exemption available.

if GST was not collected, it will be considered as cum- tax basis and need to pay GST.

Further you can inform to trust that if they pay GST, they will be elligible to claim ITC as decided in the case of Essel propack Ltd vs commissioner of CGST, Bhiwandi = ESSEL PROPACK LTD. VERSUS COMMISSIONER OF CGST, BHIWANDI .

[DR.MARIAPPAN GOVINDARAJAN]

The case law cited by our learned Friend relates to the period 2009 to 2010 when the CSR is optional but not mandatory. Companies Act, 2013 makes it mandatory and the Income Tax Act provide that the amount incurred for CSR will not be treated as income and deduction is allowed for such expenditure.

AI Summary

GST on CSR funds: recipient service providers remain liable where tax not charged; trust payments may affect input tax credit.
GST liability attaches to CSR funds received by a registered service provider if GST was not charged: no exemption applies and the supplier must discharge tax on a cum tax basis. A ruling allowing input tax credit for CSR-related spending was cited, but it concerned a period when CSR was voluntary; mandatory CSR rules and income tax treatment change the context, so availability of input tax credit to contributors does not negate the supplier's independent GST obligation.