TaxTMI 
TaxTMI 
2022 (2) TMI 1103
X X X X Extracts X X X X
X X X X Extracts X X X X
....004. (Hereinafter called the Applicant) are registered under GST with GSTIN33AADTR2290L1ZB.The applicant has sought Advance Ruling on the following questions: 1. The amount collected by rotary is pooled together only for the sole purpose of charity and humanitarian activities for the most needed ones and requisite meeting and administration expenses without any profit motive. As there is no, furtherance of business in this activity and neither any services are rendered nor are any goods being traded., whether registration is required? 2) If yes then, whether any particular thing done by the applicant with respect to any goods and/or services or both amounts to or results in a supply of good and/or services or both within the meaning of that term and 3) What would be the manner to determine the liability to pay tax on any goods or services or both ? The Applicant has submitted the copy of application in Form GST ARA - 01 and also 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 "Rotary" is an international org....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erated the submissions and the reliance based on order of Advance Ruling Authority Maharashtra in favour of Lions Club of Poona, Kothrud. He further submitted that they collect annual membership fees from the members and an entry fee from new members. The Members required clarification on the registration status and allocation of PAN numbers for which the representative stated that they are registered and each district of Rotary has a separate GST number and PAN number. They further submitted that they have built hospitals in Vellore and have done charitable activities with the contributions/donations collected. They further stated that they don't offer any recreational facilities to their members and the members meet for the sole purpose of raising funds. They were asked to furnish a detailed write up on their structure, roles, activities, balance sheet and trail of accounts relating to membership fees and donations received head wise and on specific activities for which ruling is required. 3.2. Applicant did not submit the relevant documents as called for during the Personal hearing held on 22.09.21. Hence they were addressed vide letter dt. 01.11.21 for which they replied....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., 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." This is an inclusive definition, where if the related activities are "made for a consideration by a person in the course or furtherance of business" such activities are treated as supply. The meaning of "business" as provided under section 2 (17) of the CGST Act, 2017, the relevant extract in the context of the instant case is as under: -. "business" includes- (a) ... (b) (e) provision by club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; • It is a known fact that Rotary Clubs, apart from charity, are organizing various entertaining events for their members like New Year / Diwali/Pongal celebrations, etc., and also seminars/conferences, which amounts to provision of the facilities or benefits to its members, thus a business activity. Hence, if the membership fees collected by them crosses the applicable threshold limit, they need to get registered and pay applicable GST. • if the aggregate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and written, it is observed that the applicant collects amounts from their members and also raises money for charity. The applicant has sought ruling on the GST liability on such amounts, however the applicant has not furnished details on the amounts collected by them and during the hearing has requested to clarify their liability to GST on the Membership fees collected by them from their Members. Therefore, it is seen that they have sought clarification/ruling in respect of (i) Whether they should be registered as the amount collected is pooled together for the sole purpose of charity activities; (ii). Whether the membership fee collected is subject to tax and (iii) Whether the activities performed by them are taxable and if so what is the manner of determination of tax liability for such activities. These questions fall within the ambit of Section 97 of the GST Act and they are admitted. 7.1. The issue of whether the applicant is to be registered was discussed during the Personal hearing held on 2-2.09.21, wherein the authorised representative, stated that each district of Rotary has a distinct GST number and PAN number. Further, they stated that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rate person and the supply of activities shall be deemed to take place from one such person or another and hence is a supply liable to be taxed. In the light of the above, the activities rendered by the applicant to its members for which the membership fees collected forms the consideration is a supply and is liable to be taxed. Once it is held that the applicant and it's members are distinct and that the membership fee collected from its members is found taxable, they provide taxable service and are required to be registered under the CGST Act, 2017 subject to the exceptions available with regard to the monetary limit for such registration. 8.1 Now the question of whether the activities rendered by the applicant, which they term as charitable etc., amount to supply and what is the manner of determination of tax liability is being taken up for discussion. As the applicant had not furnished any documents along with their application, during the Personal hearing held on 22.09.2021, they were asked to submit a detailed write up on the structure of the Rotary district 3231, the roles, activities, Balance sheet and trail of accounts relating to membership fees and donations recei....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ilable basic amenities to schools in the village, desilting water tanks, plantation of trees, conducted free medical camps, started RCC and carried out other needed projects. 2) Rtn PDG SVRM Ramanathan through Rotary Club of Madras Central RI District 3232 had at Kuyil Kuppam in Manamadhi Village, Chengalpet District developed a magnificent project of providing free houses to 64 Irular families. The project is done at our District 3231 territory and Rotarians of District 3231 are also participating. The project is of providing not only houses but also needs like furniture, TV, Kitchen equipments, well laid roads, Sewage, overhead tank. The total project cost is Rs. 6.00 crores and was initiated during 2018-19 and is likely to be completed during the year 2020. 3) Rotary Club of Gummidipondi Industrial City has initiated during 2018-19 construction of Low Cost houses for 62 blind persons. The project cost is Rs. 1.75 crores and 5 houses were handed over during 2018-19. Balance houses are likely to be completed during 2020. 4) Rotary Club of Vellore Mid Town constructed a Low-Cost House at the cost of Rs. 3.5 lakhs and handed it during 2018-19 to a polio affected person. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d for their members by the applicant in the year 2017-18 and with respect to the service projects, it is found that these activities pertain to the year 2018-19 . Thus these activities have already been rendered and completed in the years 2017-18 and 2108-19. 8.2 Section 95 of the CGST Act, 2017, defines Advance ruling as below:- 'Section 95. Definitions of Advance Ruling.- In this Chapter, unless the context otherwise requires,- (a) "advance ruling" means a decision provided by the Authority or the Appellate Authority lor the National Appellate Authority] to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 '[or of section 101C], in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant;" As per the above definition, Advance ruling means a decision provided by the relevant authority on questions in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Hence the activities have to be either undertaken in the present or should be proposed to be undertaken t....