TaxTMI 
TaxTMI 
2019 (3) TMI 1473
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....me 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 thepurposes of this Advance Ruling, a reference to such a similar provision under the CGST Act /MGST Act would be mentioned as being under the "GST Act". 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- FACTS RELATING TO TRANSACTION MADE BY TRUST 1. How old the trust is? STUDENTS WELFARE ASSOCIATION is 63 years old registered charitable Trust having Section 12AA & 80G certificate of exemption under Income Tax 1961 since 1973. Trust activity, is exclusively connected with students and education. 2. Whose children are admitted in the Hostel? We work solely for the benefit of students from poor families from economical backward class from rural areas who come to Pune for college education. They are so poor that they cannot afford the fees of college hostels or private commercial hostels. The students include both-boys and girls - as also those who are physically handicapp....
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....of food, hostel day to day management, office work etc. The hostel activities are solely managed by students and there is very limited staff of trust. Apart from the heavily subsidized lodging and boarding facility, we also offer the following by way of education and personality development of the students free of cost as fees charged are inclusive of these services as well. (a) Daily morning Yogasanas and Sports activities (b) Training in conversational English and foreign languages (c) Training in Computer courses (d) Arrange lectures on personality development and Entrepreneurship development. Following is the number and categories of other students staying in hostel 2018-19 S.No. Category Boys Girls Total 1. Blind 3 2 5 2. Handicapped 1 0 1 3. Single Parent (No Father) 35 20 55 4. Orphan 4 2 6 5. Drought prone area (Marathawada & Vidarbha) 187 49 236 6. BPL 15 8 23 7. from Labourer family 20 15 35 Total 361 Comparative table to show the sacrificing service offered by the trust College / private Hostel Annual Fee in Pune S. No. Name of the College Hostel Fee (incl Mess) in Rs. 1. Modern College, Pun....
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....ently and hence your opinion would be of immense benefit to the Trust. In this connection we have to state as under: We offer lodging and boarding facilities besides compulsory personality development training which includes computer awareness activities besides developing skills to operate the computers, training for development of communication skills in English and other foreign languages for a consolidated fee of Rs. 22,250/- (Rupees twenty two thousand hundred and fifty only) with no option to choose the activities such as only lodging or only boarding or only training etc. The principal supply to the students is of providing hostel accommodation and as the students stay in the hostel, they get boarding facility as well which is independently carried out by staff of the trust. No outside contractor is appointed. Those who stay in the hostel also avail the facility of getting its personality development skills sharpened by listening to the lectures of stalwart personalities in the country arranged by Trust also on Entrepreneurship development program. Learning in the library, getting training in computer application, Daily morning Yogasanas and Sports activities are subsidiar....
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....y exemption under said notification.. Thirdly, the activity carried by the trust is bound to result into incurring financial losses. The recoupment of these sums of expenditure which causes financial loss to the trust is made good out through donations. Whether the large donations given by the donors would be treated as 'service and taxed accordingly. In our opinion, donation is a supply of money and hence would be beyond the scope of the taxability. May this be ruled emphatically as only sponsored donations are believed to be covered under said mega exemption notification? May this be ruled? We therefore are interested in pursuing our application. 03. CONTENTION - AS PER THE CONCERNED OFFICER- The application has been examined and the submission/comments are as under: 1) Brief facts as submitted by the applicant: 1) The applicant M/S Students Welfare Association, is a Registered Charitable Trust under Bombay Public Trust Act, 1950 and having 12AA & 80G Certification of Income Tax since 1973 and is engaged in the activity of Hostel Accommodation for poor and deserving college students coming from rural area with an annual fee of Rs. 22250/- collected from the students. 2) S....
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.... charitable activities as defined in Para 2(r) of Notification No.12/2017-CT(Rate). However services by a hotel, inn, guest house, club or campsite by whatever name called, for residential or lodging purpose, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent are-exempt. Thus accommodation service in hostels including by trusts having declared tariff below one thousand rupees per day can be exempt (S.No.14. of Notification No.12/2017-CT (Rate). By the facts provided, the applicant's case is a bundled service, hostel accommodation with mess. In terms of Section 66F (3) (a) of the Finance Act, 1994, it seems to be a naturally bundled services. The said provision reads as - if various elements of such services are naturally bundled in the ordinary course of business, it shall be treated as provision of the single service which gives such bundle its essential character, since the essential character of the service is accommodation for residential purpose, the exemption under S.No.18 of Mega Exemption of Notification No. 25/2012-ST appears to be attracted provided the rent charged per day is below Rs. 1000/- including the mess fee. 2) Whe....
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....contentions in writing and final hearing in the matter was held on 12.12.2018 Sh. Dilip V. Sarbhai, C.A. along with Sh. Prabhakar Patil CEO and Ms. Kalpana Dabhade, C.A. appeared and made oral submissions. Jurisdictional Officer Sh. Pawan Gaikwad Suptt., Division - I (Shivaji Nagar) Pune II Commissionerate appeared and stated that written submissions have already been made. 05. OBSERVATIONS We have perused the records on file and gone through the facts of the case and the submissions made by the applicant and the department. It is thus observed that as below: 1) STUDENTS WELFARE ASSOCIATION (SWA) is 63 years old registered charitable Trust having Section 12AA & 80G certificate of exemption under Income Tax 1961 since 1973. Trust activity, is exclusively connected with students and education. Under the GST ACT, applicant is not a registered person. 2) We find that SWA is offering a bouquet of services that consists of lodging and boarding facilities besides compulsory personality development training which includes computer awareness activities such as, developing skills to operate the computers, training for development of communication skills in English and other foreign lang....
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....flicted with HIV or AIDS; (III) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or (B) public awareness of preventive health, family planning or prevention of HIV infection; (ii) advancement of religion, spirituality or yoga; (iii) advancement of educational programs or skill development relating to,- (A) abandoned, orphaned or homeless children; (B) physically or mentally abused and traumatized persons; (C) prisoners; or (D) persons over the age of 65 years residing in a rural area; (iv) preservation of environment including watershed, forests and wildlife; On this factual matrix we shall now deal with each question as per ARA as below: Question -1. Whether hostel accommodation provided by Trusts to students is covered within the definition of Charitable Activities and thus, exempt under Sl. No. 1 of notification No.12/2017-CT (Rate). From the Notification Entry no. 1 and the meaning assigned to the expression' charitable activities' aforesaid we find that activities of the Trust in providing hostel accommodation facilities to the students who come to Pune for education do not fall within the ambit of charitable ....
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....and rupees per day or equivalent. Nil Nil From the scrutiny of above exemption entry we find that the description of service is use based, meaning that if the accommodation is used for residential or lodging purpose then it is immaterial who the user is. The services provided by such hostel, for residential and lodging purposes would be covered by the scope of notification entry where the declared tariff of a unit of an accommodation is below one thousand rupees per day. Therefore the scope of the entry is restricted to use of the accommodation unit for residential and lodging purpose. Question -3. Whether the said notification would be applicable if the accommodation if decided to be given for commercial purposes in future whether the activity still would be able to enjoy exemption under said notification. As discussed herein above in Que. 2, we reiterate the scope of exemption entry 14 of the Notification 12/2017 which is applicable to accommodation unit when used only for residential or lodging purpose. Question -4. Whether the large donations given by the donors would be treated as 'service and taxed accordingly and whether only sponsored donations are believed to be cove....
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.... of conduct of religious ceremony are not exempt). Therefore the nature of income is an essential factor by ascertaining whether it will be taxable or exempt, the nature of income is loses its religious nature, it is definitely chargeable. For example, if with regard to Ganeshotsav or other religious functions, charitable trusts rent out their space to agencies for advertisement hoardings, income from such advertisement is chargeable to GST, as this will be considered as income from the advertisement services. Further, if donation for religious ceremony is received with specific to GST. But is donation for religious ceremony is received without such instructions, it may not be subjects to GST." Even though the concept is explained in the context of the Charitable Religious Trust, we find that the principle that emerges from it is equally applicable to the case at hand and that if the income is in nature of donation received without any instructions, then it would not be subject to GST. In view of the above guideline, we find that the donations received without any instruction would not be taxable however where the donor is clearly receiving identifiable benefits in return eithe....