TaxTMI 
TaxTMI 
2018 (9) TMI 235
X X X X Extracts X X X X
X X X X Extracts X X X X
.... main object of the advancement of religion, spirituality or yoga is liable to registration under the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017? 3) Whether sales of spiritual products which is incidental / ancillary to main charitable object of the applicant can be said to be business of the applicant in terms of the definition in Section 2(17) of the Central Goods and Service Tax Act 2017 and option provision Of Maharashtra Goods and Service Tax Act 2017? 4 Whether the sale of spiritual products can be said to be supply under Section 7 of the Central General Sales Tax Act, 2017 and equivalent provision of the Maharashtra Goods and Service Tax Act, 2017 so as to attract GST? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for implementing GST, the Commissioner of Sales Tax, Maharashtra issued Circular No. 357 of 2016 dated 12.11.2016 mandatorily requiring the existing registered dealers under the provisions of MVAT Act,2002 to enroll themselves for GSTIN. 2.7 Thus, the applicant was also migrated to the GST and Registration Certificate was issued to applicant on 22-09-2018 in Form GST REG-06. Copy of the Registration Certificate is annexed herewith as Annexure - 5. 2.8 Though the applicant has been registered under GST, the applicant has not filed any returns since the applicant is not engaged in any business transactions amounting to supply liable to GST. Statement containing the applicant's interpretation of law and or facts as the case may be, in respect of the aforesaid question(s) 1. The Applicant is not carrying on business in terms of Section 2(17) of the CGST Act, 2017 1.1 The Applicant submits that the Applicant is not engaged in any of the business activity as defined under the Section 2(17) of the CGST Act, 2017. 1.2 The said Section 2(17) is reproduced below for ready reference: (17) "Business" includes (a) Any trade, commerce, manufacture, profession, vocation, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sense as defined in the taxing Statute, There is no motive to earn profit out of the said activities and profit earned if any is spent on the advancement of the general public utility and hence, there cannot be said to be any business which is carried out by the Public Charitable Trust. 1.8. Thus, in the present case also, the main object of the applicant being advancement of the religious and spiritual teachings Paramkrupalu Shimad Rajchandra, the applicant cannot be said to be carrying out business as defined in Section 2(17) of the CGST Act, 2017, 2. Once the main object of the applicant cannot be considered as business, the ancillary or incidental objects also cannot be considered as business. 2.1. The applicant submits that, once the main object of the applicant cannot be considered as business, the ancillary or incidental objects also cannot be considered as business. 2.2. The applicants submits that, it sells various spiritual products (Annexure - 6) such as Books, Audio CDs, DVDs, Statues, Calendars which are for the advancement of the religious teachings of the Paramkrupalu Shrimad Rajchandra. The said books give in-depth study of the teachings of Gurudev and a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... reference: 7. (1) for the purposes of this Act, the expression supply includes (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. 3.2. From a plain reading of the above Clause (a) of Section 7(1) it is clear that supply will be liable to GST only when it is made for a consideration in the course or furtherance of business. 3.3 As submitted above, since the present case, the applicant is not carrying out any business, there can be no supplies liable to GST at the hands of the applicant. 4. Since the aggregate of taxable supplies of goods and services does not exceed Twenty Lakh Rupees, the applicant is not liable for registration under Section 22(1) of the CGST Act 2017. 4.1 The applicant submits that Section 22(1) of the CGST Act, 2017, provides for registration under the CGST Act, 2017. The said Section 22(1) is extracted below for ready reference: 22. (1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category State....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om such trade, commerce, manufacture, adventure or concern; and any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern; and any transaction in connection with, or incidental or ancillary to, the commencement or closure of such trade, commerce, manufacture, adventure or concern;" In this definition also the term 'Trade' was there and Hon. Supreme Court has observed in para 17 as under about the meaning of 'trade': "17. This decision is directly on the point supporting the case of the respondent after noticing a number of decisions on the point including the decisions cited by the learned counsel before us. It may be stated that the question of profit motive or no profit motive would be relevant only where person carries on trade, commerce, manufacture or adventure in the nature of trade, commerce, etc. On the facts and in the circumstances of the present case irrespective of the profit motive, it could not be said that the trust either was a "dealer" or was carrying on trade, commerce, etc. The trust is not carrying on trade, commerce, etc., in the sense of occupation to be a "dealer" as its main object is to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Adhyatmik Satsang Saanana Kendra (SRASSK) Regd. Address Mumbai (Adm.) Add. Shrimad Rajchandra Ashram, Mohangadh, Dharampur -396050 Dist. Valsad Gujarat, India Bhupati Chambers, Third Floor, Plot - 13, Padmakar L Khandke Marg, Mathew Road, Opera House, Mumbai - 400004 Currently Trust has administrative office in Mumbai with a hall for prayer and for discourse to be given by Gurudev during group meetings. Registered with sales tax department due to deeming provision under MVAT Act but it was not regd. With GVAT as in Gujrat there was specific exemption for Charitable Trust not carrying any commercial activity. Status Charitable & Religious Trust regd. u/s 12AA of the Income Tax Act, since last 23 years and with charity Commissioner Gujrat. Trust does not have any computation of business income. Object of the Trust Extract from the Trust Deed (In English) Para no. 8) Objectives of the Trust Fundamental objectives of the Trust - Spiritual Activities The fundamental objectives of this Trust is to carry out, get carried out and support spiritual activities such as 'Satsang' (association with saints or gentlemen), worshiping and meditation for the fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....00 SADGURU ECHOES Monthly Magazine Other objectives - Activities for spreading the knowledge. 43.94 35.00 VIVEKCHUDAMANI SHIBIR - 11-DVD Discourse by Gurudev on selected Granth/Scripture (Full one year set will include 12 DVD) Other objectives - Activities for spreading the knowledge. 412.52 400.00 VIVEKCHUDAMANI SHIBIR -11 MP3 Discourse by Guru dev on selected Granth/Scripture (Full one year set will include 12 MP3) Other objectives - Activities for spreading the knowledge. 89.19 75.00 03. CONTENTION - AS PER THE CONCERNED OFFICER AS BELOW. The dealer was a registered dealer under MVAT ACT 2002 having Constitution of the Business Public Trust and the Business Activity - Trading. The dealer have effected interstate purchases as well as Branch Transfer. The dealer have also deducted TNCT TDS in 2013-14 & 2015-16. 1) Whether the applicant which is a charitable trust with the main object of advancement of religion, spirituality or yoga can be said to be in business so as to attract the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017? Please refer the Explanation Note issue....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... both in the state/ Union Territory shall be liable to be registered under this act if his aggregate turnover in a financial year exceeds twenty lakh rupees: provided that where such person makes taxable supplies of goods or services or both from any of the special category states, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees. In this case the dealer is holding a stock of goods as on 31.03/2017 at Rs. 15882218-(which is supposed to sale/ supply under GST Act) and year wise turnover in previous years is as under Financial Year Amount 2016-17 4359967/- 2015-16 4972259/- 2014-15 4481415/- 2013-14 3926341/- Section 23 refers about the persons not liable for registration (1) The following persons shall not be liable to registration, namely:- (a) Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from the tax under this Act or under the Integrated Goods and Services Tax Act; (b) An agriculturist, to the extent of supply of produce out of cultivation of land (2) The Government may, on the recommend....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oses of this Act, the expression "supply" includes - (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or greed to be made for a consideration by a person in the course or furtherance of business; (b) Import of services for a consideration whether or not in the course or furtherance of business; (c) The activities specified in Schedule I, made or agreed to be made without a consideration; and (d) The activities to be treated as supply of goods or supply of goods or supply of services as referred to in Schedule II 04. HEARING The Preliminary hearing in the matter was held on 11.04.2018, Sh. Rahul Thakkar, Advocate along with Sh. Nilesh Parekh Office bearer and Sh. Hemal Ashra, C.A. (Auditor of Trust) and Sh. C. B. Thakkar Advocate appeared and requested for admission of application as per contentions made in their ARA. They were specifically requested to give the costing of the items which are being sold by them as detailed in their catalogues. Jurisdictional Officer Sh. Vikrant Gaikwad, Asstt. Commr. Of S.T. (D-836), Nodal -3, Mumbai appeared and stated the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f selling spiritual products such as booklets, magazine, DVD and MP3 cannot be considered as business. In order to examine the submissions made by the applicant it is necessary to reproduce the definition of business as below - 2(17) "business" includes-- (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....usiness Dictionary, it means exchange of goods or services for money or in kind, usually on a large scale enough to require transportation from place to place or across city, state or national boundaries. Similarly we find that Wikipedia defines it as "exchange of goods and services, especially on a large scale." In view of the above definitions, now we examine the activities that are being undertaken by the applicant. We find that the applicant in their submissions have stated that they sell various spiritual products (Annexure-6) such as Books, Audi CDs, DVDs, Statues and Calendars which are for advancement of religious teachings of Paramkarpalu Shrimad Rajchandra. Further we find that the jurisdictional officer in his submissions has stated that the applicant is engaged in sale of goods or providing of services which are as under:- "The dealer is engaged in supply of goods under GST. The dealer is holding a stock of goods as 31/03/ 2017 at Rs. 15882218/-. The year wise details of income /consideration received from sale of goods (Spiritual Products) in previous years is as under - 2016-17 - Rs. 4359967/- 2015-16 - Rs. 4972259/- 2014-15- Rs. 4481415/- 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... this manner or there is any decline in the value of the securities, then the Trustees or any Trustee from out of them shall not be responsible for the same. Para - (8) OBJECTIVES OF THE TRUST Fundamental objectives Of the Trust - Spiritual Activities The fundamental objectives of this Trust is to carry out, get carried out and support spiritual activities such as 'Satsang' (association with saints or gentlemen), worshiping and meditation for the final salvation in such a manner that the persons from all castes desirous of salvation attains salvation and their unique devoutness to Eternal "Vitrag' Path Leading, Most Compassionate Paramkrupalu Shrimad Rajchandraji increases by following HIS commandments, gaining faith and sentiment towards the mode of obtaining salvation taught by 'Tirthankar' Bhagvan Shree Mahavir Swami and Vitrag Prabhu and famous as Jain Religion in the world and by becoming non-attached to worldly things or happiness. Other Objectives of the Trust:- (1) Social Services, Public Aids and Religious Activities To carry out, get carried out and support activities which uplifts people's social, worldly, economic conditions and religious activities su....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or for whatever amount that may receive for the Trust by donation, gift or any manner, shall be valid and binding to the Trust. Para (20). Subject to the law, the Trustees shall have absolute right and authority to sell the Trust Property by public auction or private negotiation, to let out on long lease, to transfer, change, exchange or to make disposition or transfer in such a manner as may come into consideration of the Trustees etc. and they shall have absolute right to sign on behalf of the Trust on such documents which may be required to be prepared in respect thereof, to get or give them same registered and to undertake such proceedings which may be required to complete the said works and they shall also hive absolute right to get prepared the necessary documents after giving consideration in respect thereof and they shall have absolute right to collect the sale proceeds and to issue receipt in respect thereof." Now in view of the detailed submissions of the applicant, submissions of the jurisdictional officer, relevant paras of Trust Deed and detailed related discussions above, we examine the scope of supply as per Section 7 of the CGST Act which is as under:- Sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to comply with below mentioned criteria:- i) The entity must be registered under section 12AA of the Income Tax Act. ii) The services provided by the entity must be a charitable activity. Under the GST Act, not all services provided by a Trust registered under Section 12AA would be termed as a charitable activity. Only the following activities are termed as charitable activity and are exempt from GST: • Services relating to public health like: • Care or counseling of terminally ill persons or persons with severe physical or mental disability; • Persons afflicted with HIV or AIDS; • Persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; • Public awareness of preventive health, family planning or prevention of HIV infection; • Advancement of religion, spirituality or yoga; • Advancement of educational programs or skill development relating to: • Abandoned, orphaned or homeless children; • Physically or mentally abused and traumatized persons; • Prisoners; or • Persons over the age of 65 years residing....