TaxTMI 
TaxTMI 
2019 (10) TMI 1137
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....ts to the Trust is exempted from the levy of Goods and Services Tax 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 reference is specifically made to any 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, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- A. Statement of the relevant facts having a bearing on the question(s) on which the advance ruling is required. 1.1 The Children of the World (India) Trust, Bombay (hereinafter referred to as the "Applicant") is a non-political Charitable Trust established in India pursuant to an Indenture of Trust dated 29.03.1982 (hereinafter referred to as "The Trust Deed"). Clause 3 (iii) of the Trust Deed provides about 26 (A to Z) objects/ purposes of the Trust, of which, the relevant objects/ purposes are reproduced below: *3(iii)........ ....
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....f care and protection": Section 2(14) of the JJ Act defines "Child in need of care and protection" means a child - (i) Who is found without any home, or settled place of abode and without any ostensible means of subsistence; or (ii) ............ (iii) ............ (iv) ............ (v) Who has parents or guardian and such parent or guardian is found to be unfit or incapacitated, by the Committee or the Board to take care for and protect the safety and well being of the child; Or (vi) Who does not have parents and no one is willing to take care of, or whose parents have abandoned or surrendered him; or (vii) (viii) (x) (xi) This definition encompasses the term "abandoned, orphaned, or homeless children" as mentioned in the Exemption Notification No. 12/2017-C.T. (Rate) dated 28.06.2017 as amended. 1.5 The Applicant is registered as a Specialized Adoption Agency (hereinafter referred to as The SAA') under Section 41 of the JJ Act read with Rule 21 of the JJ Rules. The copies of Certificate of Recognition bearing No.13-7/2001 CARA dated 28.02.2012 issued by Central Adoption Resource A....
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.... about 20 care taker lady-servants and nursing staff around 9 who look after these infants adoptive children round the clock for all the days. (ii.) Children in the age group of 2-3 years are taught fine motor skills - a medical term which denotes ability or skill in coordination of small muscles in movements - usually synchronization of hands and fingers - with the eyes. Development of fine motor skills involves clay activities, paper sticking, joining and separating links and blocks. Development of cognitive skills involves naming and identifying objects, body part recognition, identifying colours building blocks, shape sorter, etc. It's an educational as well as a skill development for a child in that age group. Professional persons and volunteers are engaged to teach these children. (iii.) Children in the age group of 3 to 6 years are enrolled in the school. During the academic year 2018-19, 11 children were enrolled in the municipal school and 4 children in a private school. A letter bearing No. 482 dated 03.04.2019 from the Principal of the Municipal School confirming the enrolment of 11 students is submitted. These Children are also provided in-house comput....
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....d 23^rd March 2017 ("The March Memorandum") wherein it was notified that "in accordance with Regulation 46(1) & (2) of the Adoption Regulations 2017 and Section 61 of the JJ Act, CARA notifies that the Adoption Fee as prescribed under Schedule 13 of the Adoption Guidelines shall continue to remain in force with effect from 16-1-2017 till the further orders." 1.15 on 5th April, 2017, CARA issued an Office Memorandum No. IP03/20/2016/CARA dated 5^th April, 2017 ("The April Memorandum") wherein CARA has notified that "Payment of Adoption fees (earlier known as CCC) is under revision and awaiting Govt. approval. However, the existing Fee has been continued as intimated vide our circular dated 23rd March, 2017, shall be made by the Prospective Adoptive Parents in the following instalments: (a) In-Country Adoption (i) At time of acceptance: Rs. 24,000/ (ii) At time of handing over the Court Order: Rs. 16,000/ Total: Rs. 40,000/ Note: The legal fee is included in the above amount and the expenditure by Specialized Adoption Agencies (SAA) on this head shall not exceed 20% of total Adoption Fees received. The ratio of payment shall ....
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.... The Applicant in a way, provides help support and protection to the Child as a good samaritan on humanitarian and compassionate grounds. It provides an opportunity for education and development of skills of a child through rehabilitation and social integration by facilitating adoption, foster care, etc. The Applicant is a charitable, philanthropic and social welfare activity with no business or commercial interest at all. It is also true that a Child under the JJ Act is not a 'goods' nor is any service rendered to him. POSITION UNDER THE GST ACT B.1 The Central Government has, pursuant to the powers vested under Section 11 of the CGST Act, issued a Notification No. 12/2017-Central Tax Rate dated 28.06.2017 (hereinafter referred to as 'The Exemption Notification') whereby an exemption as specified therein is granted for intra-state supply of services of services specified therein. The said Exemption Notification provides that: Services by an entity registered under section 12AA of the Income Tax Act, 1961 by way of charitable activities are exempt front whole of the GST. Section 2 (r) of the said Exemption Notification defines charitable activities means act....
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.... authorities, B.5 The Applicant further submits that the Adoption activity is not covered also within the scope of the term 'SUPPLY' as provided vide Section 7 of the CGST Act, 2017. The relevant Clause of Section 7 is reproduced below for ready reference: "Section 7: Scope of Supply (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: (b) import of services for n consideration whether or not in the course or furtherance of business, [and] (c) The activities specified in Sch. I, made or agreed to be made without a consideration; [***] [(d)****] [(1A) where certain activities or transactions, constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply, of goods or supply of services as referred to in Schedule II.) B.6 The Applicant states and submits that firstly, the activity of placing a child in adoption does ....
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....tretch of imagination, whatsoever, cannot considered as a consideration against the business activity. B.10 The Applicant also submits that there are two important limbs of any supply under GST i.e. (i) consideration and (ii.) in the course or furtherance of business. Where the consideration is not extant in a transaction such the one of placing a child in adoption, that transaction does not fall within the ambit of the definition of supply. But in certain scenarios as elucidated in Schedule I of the CGST Act, the key element of consideration is not required to be present for treating certain activities as supply. However, the Adoption activity is, as stated above, NOT an activity covered under said schedule I. B.11 Another key element is whether any invoice is issued by the supplier in the transaction. As stated above, the Applicant do not issue any invoice. It therefore does not qualify as "Supplier". In fact, under the JJ Act, the Applicant is prohibited to do so. The amount to be reimbursed towards Adoption Expenses by the Prospective Adoptive Parents is prescribed under Rule 46 of the JJ Rules and the Applicant has no control or discretion on deciding such amount. B.1....
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....siness and hence GST is not leviable. Even if it is held that their activities are covered under the definition of 'supply or business, it would still be covered under the notification 12/2017 CT dt. 28-07.2017 (as amended), under Entry no 1. i.e. "Advancement of educational programmes or skill development relating to abandoned, orphaned or homeless children". Their activities include, admission and taking care of orphaned, abandoned children between 1-6 years till they are adopted by prospective parents. They are covered by Juvenile justice care and Protection Act, 2015 and Rules, 2016. Their activities are governed by Central Adoption and Resource Agency (CARA) as child welfare committee. 05. OBSERVATIONS AND FINDINGS: We have gone through the facts of the case, documents on record and submissions made by the applicant. The Applicant seeking ruling on whether their activities are exempted under the Entry No. 1 of the Notification 12/2017-CT dated. 28.07.2017 (as amended) and in the second part of the question the applicant queried, whether the receipt of the Adoption Fees paid under Regulation 46 of the Adoption Regulations, 2017 by the Prospective Adoptive Parents to th....
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....ery aspect of their activity is controlled and processed by the Government through its organ, namely, the Central Adoption Resource Agency (CARA) established by the Government under Section 68 of the JJ Act. We find that the applicant is a Specialized Adoption Agency as defined under the relevant laws and they have established a shelter, namely, "Vishwa Balak Kendra", in their own building and provide shelter, food, clothing, healthcare, foster care and basic education to abandoned, orphaned or homeless children below 6 years of age till the time of adoption. We further find that their activities which are in the nature of "Charitable Activities", also consists of advancement of educational programmes or skill development relating to abandoned, orphaned or homeless children. Such activities are clearly covered under Sr. No. 1 of Notification No.12/2017-CT. (Rate) dated 28.06.2017 as amended from time to time and the applicant being an entity registered under Section 12AA of the IT Act, such activities carried out by the applicant are exempted by the said notification. We now take up their query as to whether the receipt of the Adoption Fees paid to them by the Adopting parents, ....