GST on amount received by NGO

[Kaustubh Karandikar]

1)Is there exemption from GST for NGO/Public Charitable Trust (PCT)? 2) If no, will it be eligible for the 20-lakh base exemption? 3) Sponsorship received by NGO/PCT not subject to reverse charge if NGO/PCT is not a corporate/partnership firm? 4)Will NGO/PCT have to charge GST on sponsorship fees? 5)Grant received by NGO/PCT not subject to reverse charge since (i) no service (ii) in the nature of a donation? 7) No GST chargeable on grants received by NGO/PCT?

[KASTURI SETHI]

Dear Sir,

Query-wise reply is as under:-

1. Only charitable activities (specifically mentioned) are exempted from GST. Commercial activities by NGO/charitable trusts are not exempted.

2. Threshold exemption is available to NGO/PCT.

3. Yes. Sponsorship services provided to any body corporate or partnership firm fall under RCM and in all other cases, tax is to be paid by the supplier of service.

4. Yes.

5. Agreed

6.(7) Yes.

Also go through the following case laws :

2018 (16) G.S.T.L. 332 (A.A.R. - GST) = 2018 (9) TMI 235 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRAIN RE : SHRIMAD RAJCHANDRA ADHYATMIK SATSANG SADHANA KENDRA

2019 (20) G.S.T.L. 779 (App. A.A.R. - GST) = 2019 (1) TMI 25 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRAIN RE : SHRIMAD RAJCHANDRA ADHYATMIK SATSANG SADHANA KENDRA

Also see Board's Circular No.66/40/2018-GST dated 26.9.18 and Board's Flyer No.39 dated 1.1.18

AI Summary

GST exemption for charitable activities limited to specified nonprofit services; sponsorships may attract reverse charge or supplier liability. Only specified charitable activities by NGOs/Public Charitable Trusts are exempt from GST; commercial activities are taxable. Grants and donations for exempt charitable activities are not treated as taxable supplies. NGOs/PCTs can avail the general threshold exemption. Sponsorships are consideration for services: sponsorships from body corporates or partnerships attract reverse charge, while sponsorships from others must be taxed by the supplier; NGOs must charge GST on taxable sponsorship fees.