GST on Donations collected from Customers

[ROHIT GOEL]

Dear Sirs,

One of our client(a company) runs a television broadcasting channel. Due to the COVID-19 Crisis, the company has started a campaign on their channel where they are requesting the audience to send money to the company's bank account and then post accumulation of say ₹ 50 lakhs, the company would donate entire amount to a Trust registered u/s 12AA/80G of Income Tax Act. No part of the money would be retained by the company at all.

The company is not registered u/s 80G/12AA, so my query is whether the amounts collected by the company from their customers/audience be treated as supply and liable to GST or would it be simply treated as a transaction in money and as such held to be non taxable?

Kindly advice with supporting judicial decisions/analysis of legal provisions.

[Rajagopalan Ranganathan]

Sir,

The money collected is towards donation and not against ant supply of goods or service or both. Hence it is only amere trasaction in momey and hence it is not liable to GST. This is my opinion.

[Ganeshan Kalyani]

GST is not applicable as there is no elment of supply and consideration.

[KASTURI SETHI]

Your client's activity is out of the definition of 'service'as defined under CGST Act. This is also out of definition of 'supply', 'consideration' and 'business' as per the definitions of these terms in CGST Act. Board's Flyer No.3 dated 1.1.18 may help you in arriving at conclusion.

I also support the views of both experts.

[Venkataprasad Pasupuleti]

It would not be liable for GST. Your client is only acting as custodian and in the nature of transaction in money. Consequently gets excluded from the definition of 'service'.

I concur with the above views of experts.

[DR.MARIAPPAN GOVINDARAJAN]

Not taxable under GST.

AI Summary

GST applicability on donations: voluntary collections remitted as donations are not consideration and thus not taxable. Collections made by the broadcaster as voluntary donations, fully remitted to a charitable trust and not retained, are not consideration for any supply and therefore fall outside the definitions of service, supply and business for GST purposes; the broadcaster acts as a custodian/conduit and such transactions are treated as transactions in money and are not taxable under GST.