TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 805
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....licant 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 managed by extremely dedicated volunteers from th....
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....tion 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. Hence following ingredients must be satisfied: a. T....
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....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 mutuality and they cannot be regarded as related person. They have referred t....
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....ge 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 for 2 years. They supervise the team handling the funds and the office bearers are solely responsible for the same * Like other club's membership is not marketed to join the ....
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....edients 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 indirect benefit of the members. Thus, any membership fee collected by the Association from its members is to be construed as 'Consideration' as the same has been paid for supply of services. * IITMAA has fulfilled both the conditions prescribed by Sect....
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.... 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 that supply of services by an unincorporated association or body of persons to a member for a consideration shall not be treated as supply of service. * since an association and its members are the same because of principle of mutuality, they cannot be regarded as related person and therefore not covered under Entry number 2 of schedule I which provides that s....
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....tworking 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 associate member. An electronic database of Alumni registry is maintained. Members can use the services of the applicant, receive publications/newsletters, attend alumni meetings and events, facilities at IIT Madras. The lifetime membership fees are Rs. 1000/- for the alumni members with no membership fees for associate members. It is seen from the Financial accounts for 2017-18 s....
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....ion........;......;...............; ...................................... (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 of GST Law, the applicant being an unincorporated association or body of persons is a person under Section 2(84) (f) and their members being 'Individuals' are also 'person' as per Section 2(84) (a). Hence, there are two different 'persons', one of whom is the supplier and other the recipient. Section 2(17) of the Act defines 'Business' as under (relevant portion extracted): (17) "business" includes- (a) any trade, commerce, manufacture, profession, vocation, ad....
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....cant 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 magazines and newsletters, maintaining websites, and technology infrastructure for the benefit of its members. Thus, the supply of the services of these activities by the applicant to its members for consideration either in form of membership fee or additional charges collected for specific activities constitute a 'supply of service' under Section 7(1)(a) of CGST/TNGST Act as it is in the course of furtherance of business of the applicant as per Section 2(17) of the Act. This is also reiterated in Circular No. ....