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 Rules for NGOs and Charitable Trusts: Exemptions, Sponsorship Fees, and Grant Treatment Explained An individual inquired about the Goods and Services Tax (GST) implications for NGOs and Public Charitable Trusts (PCTs). The questions addressed whether NGOs/PCTs are exempt from GST, the applicability of the 20-lakh base exemption, and the treatment of sponsorship and grants. The response clarified that only specific charitable activities are GST-exempt, while commercial activities are not. NGOs/PCTs are eligible for the threshold exemption. Sponsorship services to corporate or partnership firms are subject to reverse charge, and NGOs/PCTs must charge GST on sponsorship fees. Grants received, being donations, are not subject to GST.