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2020 (10) TMI 805
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....036 (hereinafter referred as the applicant or IITMAA) is registered under the GST Act 2017 vide GSTIN No. 33AABAI5857R1Z2. The Applicant has sought Advance Ruling on the following question: Whether collecting money by IITMAA from its members and receiving donations/grants/subsidies/budgetary support from IIT, Madras to defray expenses incurred towards administering the association and other expenses related to its engagement activities initiated by members themselves amounts to supply or not. Consequently, whether there is any liability to comply with GST law including registration and payment of tax. The applicant submitted a copy of challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that they strive to create and maintain a life-long connection between IIT, Madras (the institute) and its Alumni (members of IITMAA). The Association works to connect Alumni, supports students of the institute and builds an unforgettable institute experience through diversity of events/ programmes and services by members to themselves and the association activities are ma....
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....erefore, when neither the ingredients of the definition of supply or business is met, there cannot be a need to levy GST. In view of the above facts, the applicant has stated that just because the aggregate receipts exceed the threshold limit of Rs. 20 Lakhs, no registration is required to be taken. As there is no business or furtherance of business involved in this activity and further no services are rendered nor any goods or being traded, whether any registration is required is the question raised by them. 2.4 The applicant has stated that there was no previous incidence of Service Tax which has been subsumed in the GST and therefore, on the ground of Revenue Neutral Rate and negative previous tax incidence, GST is not applicable on the activity of alumni association.; To tax the transaction between an association and its members, said transaction must either fit, either under Clause (a) or Clause (b) of Section 7 which defines supply. Clause (a) covers all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. ....
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....rent persons to tax a transaction under said provision. Merely because an association of person has been included as person u/S. 2 (84) does not imply that members of such association are different persons. The applicant has contended that clause (e) of article 366(29A) of constitution only enables to tax supply of goods by an association to its members as deemed sale. It does not enable to tax supply of service as a deemed service. Even para 7 of Schedule II of CGST Act 2017 only covers supply of goods by any unincorporated association. It does not cover supply of services. The applicant has further stated that Section 7(1)(c) covers the activities specified in Schedule I, made or agreed to be made without a consideration. If self-supply is taxable, it must be covered under Schedule I. Also entry number 2 of Schedule I states that Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business shall be treated as supply. However, members are not covered under Section 25 as distinct person. In the instant case the association and members are the same because of principle of mutual....
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....for the reunion; a fee for this is fixed by the co-coordinators based on the various arrangements. • Knowledge sharing sessions are arranged by Chapters in various cities and a small fee is fixed based on the expenses that could be incurred. The activities of alumni are classified as either social or knowledge sharing which is restricted only to members. • The names of the events are: - Diamond Jubilee Celebrations of IIT Madras; Reunion of Various class; AI Deep Dive Workshop; Meet the Mentors; Willkommen-Welcome dinner for the fresh alumni to the association • They do not conduct any fund raising programs for the institute or activities for general public. • The alumni volunteers plan the activities based on preferences and requests from fellow alumni and organize events accordingly • For ease of operation a single bank account was opened and a small team is posted on IITM campus to handle the inflow and outflow of funds. Funds from IITM and fee collected for organizing meet is all collected and paid from this account • Elections are held every alternate year and Office bearers, Volunteers, hold office ....
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....2017 relating to taxability, Section 7 (1) relating to "Supply" and definition of "business" under Section 2 (17), it can be inferred that if the transaction between an association and its members satisfies the ingredients to qualify as supply of goods or services for a consideration, the same has to be taxed • As per the definition of "Person" under the CGST Act 2017, there are two persons namely, the Association and the other person being the member of the Association. Hence the Association and member are distinct entities. • The CGST law has given very wide connotation for services, which will cover any activity other than which involves goods, money and securities. Therefore, the activity of the Association in as much as they are conducting the activities exclusively for the members can be considered as service being provided by the association to its members • From the inclusive definition of the term 'Consideration', it can be construed that the membership fee collected by the Association from its members is not only meant for meeting administrative expenses, but is also towards organizing the various activities for the direct or indirec....
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.... and State Tax Officers. The question raised by the applicant and for decision is whether collecting money by IITMAA from its members and receiving donations/grants/ subsidies/budgetary support from IIT, Madras to defray expenses incurred towards administering the association and other expenses related to its engagement activities initiated by members themselves amounts to supply or not. Consequently, whether there is any liability to comply with GST law including registration and payment of tax. 6.2 It is the contention of the applicant that • To satisfy the definition of "Business", there must be some benefit/facility to its members and in their case there is no benefit or facility to the members of their own alumni association • Merely because an association of person has been included as person under section 2 (84) of the GST Act does not imply that members of such association are different persons and as per Para 7 of Schedule II of the Act, the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration shall be treated as supply of goods which implies....
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.... applicant. 7.2 It is seen from the Memorandum of Association that the applicant is registered under Tamil Nadu Societies Registration Act 1975 as a society with Director IIT Madras as Patron and general body consisting of all alumni members of IIT madras and staff of the society. The mission and objective is to provide a forum for its members and to facilitate professional networking among alumni, students, faculty for mutual benefit in academic, professional, and business areas and to facilitate alumni to contribute to IIT Madras by raising funds, sharing knowledge/expertise, research, academic support, technical collaboration etc. the objectives also include helping alumni families and needy alumni and mobilize funds to manage the association affairs. It is seen from the Bye-laws of the applicant that the activities of the applicant include conducting seminars, holding meetings, organizing events, publishing magazines and newsletters, maintaining websites, and technology infrastructure. Every person who has received a degree of diploma from IIT Madras is eligible to be an Alumni member on payment of membership fees and all academic staff of IIT Madras are eligible to be as as....
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....n 2(84) of the CGST/TNGST Act defines 'Person' for the purposes of the Act as (84) "person" includes- (a) an individual;....................;..................;.............; (b) a Hindu Undivided Family; ................................................... (f) an association of persons or a body of individuals, whether incorporated or not, in India or outside India; (g) any corporation........;......;...............; ...................................... (l) society as defined under the Societies Registration Act, 1860; (m) trust; and (n) every artificial juridical person not falling within any of the above; In the instant case, the applicant is a society registered under Tamilnadu Society Registration Act 1975 and is in effect an association with the alumni of IIT Madras as members and hence, the applicant is a 'person' under CGST/TNGST Act as per Section 2(84) of the Act. The applicant has contended that the 'Principle of Mutuality applies in the case at hand and the applicant and its members are not distinct persons and therefore levy do not apply on the consideration. For the purposes ....
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....tal, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; Therefore, in order to tax, the activity must be a supply of either goods or service, the supply is to be for a consideration to a person in the course of furtherance of business. i.e., there should be a supply of goods or service, recipient, provider, consideration, in the course or for furtherance of business. In the instant case it is evident from the Byelaws/MOA submitted by the applicant that the mission of IITMAA is to provide a forum for its members and to facilitate professional networking among alumni, students, faculty for mutual benefit in academic, professional, and business areas and to facilitate alumni to contribute to IIT Madras by raising funds, sharing knowledge/expertise, research, academic support, technical collaboration etc. the objectives also include helping alumni families and needy alumni and mobilize funds to manage the association affairs. The applicant collects membership fee from the members and also collects charges for various events, activities which include conducting seminars, holding meetings, organizing events, publishing....