As per sec.24 of CGST Act, persons who are required to pay tax under reverse charge are liable for compulsory registration under GST. But Sec.23 provides that registration requirement is not applicable any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act.
In the light of the above, I request the Experts to clarify whether a NGO registered u/s 12AA of the income tax Act, which is engaged in recognized charitable organization is liable to take registration when it makes any payment to an advocate which attracts GST under RCM.
NGO Under Section 12AA Must Register for GST When Paying Advocates if Turnover Exceeds Limit An individual sought clarification on whether a Non-Governmental Organization (NGO) registered under Section 12AA of the Income Tax Act must register for GST when paying an advocate, which incurs GST under the Reverse Charge Mechanism (RCM). Responses indicated that if the NGO qualifies as a business entity with a turnover exceeding the prescribed limit, it must register for GST, regardless of its charitable status. The discussion highlighted the complexity and potential for legal disputes, with differing views on whether the NGO's activities exempt it from GST registration under specific exemptions. The debate centered on interpreting the applicability of GST provisions to such NGOs. (AI Summary)
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