TaxTMI 
TaxTMI 
2022 (10) TMI 309
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....stha, 1st Floor, Madhav Parvati Complex, Veer Savarkar Marg, Sangamner, Ahmednagar-422605 ("hereinafter referred to as "the Appellant") against the Advance Ruling No. GST-ARA-97/2019-20/B-91 dated 10.11.2021, pronounced by the Maharashtra Authority for Advance Ruling (hereinafter referred to as "MAAR"). BRIEF FACTS OF THE CASE 3.1 The Appellant is a charitable trust registered under Maharashtra Public Charitable Trust Act, 1950, vide Registration No. F-2378 w.e.f. 15.02.1993. The Trust Jayshankar Gramin and Adivasi Vikas Sanstha Sangamner (hereafter referred to as 'trust') is also registered under Societies Registration Act, 1860, vide registration number Maha/2041/92 w.e.f. 23.12.1992. The Appellant is registered under Section 12AA of the Income Tax Act. 1961 w.e.f. 08.10.2009 vide Registration No. PN/CIT-I/REGN./12A(a)/63/2009-10/5304 & PN/CIT/80G/115/2009-10/5298. 3.2 The trust has its head office at Ist floor, Madhav Parvati Complex, Veer Savarkar Marg, Sangamner. The destitute for children is located at Akole bypass road, Sangamner. The trust undertakes services to orphans and homeless children by way of providing shelter, education, guidance, clothing, food a....
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....hat case, the lesser amount, which is incurred actually, is granted. 3.6 Since the Appellant was not sure of the GST applicability of the "One Stop Crises Centre", an application was made with the Authority of Advance Ruling for the GST, Maharashtra (MAAR) for the purpose to ensure if the aforementioned transactions are liable to GST or not. 3.7 The MAAR passed an order bearing No.GST-ARA-97/2019-20/B-91 dated 10.11.2021 confirming the GST applicability on the impugned transactions. GROUNDS OF APPEAL 4 Aggrieved by the aforesaid Advance Ruling passed by the MAAR, the Appellant has preferred the present appeal before the Maharashtra Appellate Authority for Advance Ruling for Goods and Services Tax (hereinafter referred to as the "MAAAR") on the following grounds: 4.1 That MAAR, in their observations and findings in point numbers from 5.5 to 5.13 in the impugned Advance ruling order, has made a reference to the exemption Notification No. 12/2017 dated 28.06.2017 with regard to the charitable activities; that the MAAR has righteously noted that the main thrust is to identify as to whether the impugned activities are covered under the definition of charitable activities,....
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....te, the fundamental states that the cause of religion must be advanced. In general, to 'advance' a religion means to promote or maintain or practice it, and increase belief in the supreme being or entity; that is the object or focus of the religions. Promoting particular tenets of religion: some charities whose aims include advancing religion might choose to concentrate on promoting particular tenets of the religion in order to further what they believe to be an inherently important aspect of that religion. 4.5 Further, to be recognized as charitable, all organizations advancing religion must be able to show that there is a moral or ethical framework which is promoted by the religion. This moral or ethical framework is considered by many to offer benefits to wider society, as well as individual comfort, solace and a sense of purpose. 4.6 As per the Government of Canada - To advance religion in the charitable sense means to preach and advance the teachings of a religious faith, and to maintain the doctrines and spiritual observances on which those teachings are based, such as:- • establishing and maintaining buildings for religious worship and other religi....
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....t of Rs 12,77.832/-. Therefore, grants received by the trust only cover the expenses incurred in specified manner and services provided by the trust to the government (as an implementing agency) are virtually free of cost and lacks essence of consideration. Further, in the case of APITCO Vs. Commissioner of Service Tax, Hyderabad (2010 (7) TMI 176 - CESTAT, BANGALORE), in which the Hon'ble Supreme Court upheld the decision of Tribunal that the assessee company had implemented welfare schemes consisting of training, technology facilitation, etc. for the Government for the benefit of the vulnerable / weaker sections of the society and grant in aid received from the Government was utilized for this purpose alone. Tribunal had held that in implementation of the Governmental schemes, the assessee as an implementing agency did not render any taxable "service" to the government. 4.13 The Judgment further stated that the department seems to be considering the Governments to be "clients" of APITCO. The question now is whether there was "service provider-client" relationship between the assessee and the governments. Here, again, the nature of the amounts paid by the governments to the....
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....ly appreciated the fact that the activities are not in the course and furtherance of business. 4.18 REIMBURSEMENT of ACTUAL EXPENSES Under the one stop crisis Centre Scheme; the Appellant was selected as an implementation agency vide "Aadesh bearing number 686/19-20 dated 28.05.2019" (also refer agreement dated 31.03.2019); further a grant of amount up to Rs. 2,00.000/- per month was approved under the said scheme; wherein the trust will only act as an implementing agency and will use grant amount in specified manner. 4.19 Grant amount of Rs. 2.00.000/- is factually to be used as under: SI. No. Designation Required No. of People Honorarium (per month per person) Total Honorarium 1 Centre Administrator 01 25,000 25,000 2 Case Worker 02 15,000 30.000 3 Police Facilitation Officer (PFO) 01 15,000 15,000 4 ParaLegal/Personnel/La wyer 01 15,000 15,000 5 Para Medical Personnel 02 18,000 36,000 6 Counsellor 01 15,000 15,000 7 IT Staff 01 15,000 15,000 8 Multi-purpose Helper 01 9.000 9.000 9 Security Guard/Night Guard 04 10,000 40,000 ....
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....capped the transaction to Rs 2.00,000/- they shall not be paying Rs 36,000/- as GST on the above transactions. Thereby the Appellant Trust shall incur cost of Rs 36,000/- for serving humanity. 5.3 In the second Scenario, since the implementing agency is paying Rs 2,00,000/- as total consideration, then as per the inclusive concept the tax liability arrives at Rs 30,509/-. Here again the Appellant Trust shall incur cost of Rs 36,000/- for serving humanity. 5.4 In the third Scenario (ideal scenario) there is no GST charged on the transaction. This is an ideal scenario since, for the activities as mentioned above that serves humanity and thereby saves the religion, it is transaction wise inefficient to levy, collect and pay GST on these activities; 5.5 There is unnecessary flow of transactions if. the Government (ministry of Women & Child Development) pays GST to the implementing agency & Implementing agency pays back to the Government (CBIC), and Government further uses these funds for promoting charitable activities. 5.6 To be precise the one stop crisis scheme was planned by the Central Government and implementation was left to the states. This scheme was funded vide th....
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....lopment. It should be noted that if monthly expenses incurred are less than the said limit, lesser amount is granted. Considering the modus operandi, here we believe that trust is only acting as a pure agent of government. iv. Further, since they are making payment of Rs. 2.00,000/- to the designated persons and claiming reimbursement of exact same amount from Government, then the GST is to be reimbursed too by the Women & Child Development Ministry of Government of Maharashtra. Since the One Stop Crisis centre GR is not aligned with the GST advance rulings, we request you to further clarify on the ambiguity raised due to the advance ruling order made in our issue. RESPONDENT'S SUBMISSIONS 7. The Respondent vide their letter dated 27.12.2021 have filed the written submissions in the subject Appeal, the extract of which is mentioned herein below: 7.1 That any activity carried out by the entity in the course or furtherance of business is included in the ambit of business definition, and hence, will be considered as "supply" under GST; 7.2 Although the phrase "in the course or furtherance of business" is not defined under the GST law, but the same is broad eno....
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....hment or support of an enterprise deemed advantageous to the public; a subvention" That the Appellant are reimbursed up to Rs.2.00,000/- by the Central Government against the expenses incurred towards supply of goods and services to the destitute women under the subject scheme; that the said supply of goods and services, viz. food, shelter, medical assistance, legal assistance, etc. provided to the destitute women can aptly be deemed as social service, being rendered to the women in particular and public in general, and thereby, the said reimbursement amount of Rs.2,00,000/- can righteously be deemed as subsidy, sanctioned by the Government; that as per the definition of the term "consideration" provided under section 2(31) of the CGST Act, 2017, subsidy given by the Central Government or a State Government shall not be included under the definition of the term "consideration", and hence, the subject transaction between the Appellant and the Government would not be considered as "supply" in terms of the Section 7(1)(a) of the CGST Act. 2017. and accordingly, the reimbursement amount under question paid by the government to the Appellant under the subject scheme will not be subje....
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....be any levy of GST on the reimbursement amount received from the Department of Women and Child Development, Government of Maharashtra. He also alternatively contended that since the impugned amount were granted to the Appellant for undertaking the social activities grossly meant for welfare of destitute women in particular and thus public in general, therefore, the said amount received from the State Government may be construed as "subsidy" in terms of the dictionary meaning of the same as the term "subsidy" has not been defined under the CGST Act, 2017. DISCUSSIONS AND FINDINGS 12. We have carefully gone through the appeal memorandum encapsulating the facts of the case and the grounds of the appeal along with all the additional submissions made by the Appellant. We have also examined the impugned Advance Ruling passed by the MAAR, wherein it has been held that the reimbursement amount received by the Appellant from the Department of Women and Child Development, Government of Maharashtra under the subject "One stop Crises Centre Scheme" will be subjected to levy of GST. It is further noted that the MAAR has observed that the impugned activities undertaken by the Appellant wil....
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....e subject activities undertaken by the Appellant can be construed as supply in terms of section 7(1)(a) of the CGST Act, 2017 or not. To examine this issue, we would like to refer to the definition of the term "supply" as provided under section 7(1)(a) of the CGST Act, 2017, which reads as under:- Section 7 (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." 18. Thus, the term "Supply", under the CGST Act, has got very wide connotation due to the presence of the clause "all forms of supply of goods or services or both". For any transaction to be qualified as "supply" under CGST Act, 2017. the said transaction is required to satisfy the following pre-requisites:- (i) that such supply should be made by a person for a consideration; (ii) that such supply should be made in the course or furtherance of business; 19. Now, we would like to refer to the definition of the term "consideration" as p....
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....the Government of Maharashtra under the "One stop crises Centre Scheme" for taking overall care of the destitute women who are litigating divorce, or homeless, or the victims of domestic violence. The said activities undertaken by the Appellant are clearly for the welfare of these destitute women, and thereby, serving the mankind in general. Hence, we are of the opinion that the said amount of money reimbursed by the government to the Appellant is nothing but subsidy as the entire money is being spent in the activities which are advantageous to the public. 22. Now, once it has been established that the subject amount reimbursed by the government to the Appellant is in the nature of subsidy, it is concluded that the said reimbursement amount cannot be construed as "consideration" in terms of its definition provided under Section 2(31) of the CGST Act, 2017. which has been reproduced hereinabove. 23. Further, in absence of any consideration, it is opined that the subject transactions/activities undertaken by the Appellant, wherein they are providing various assistances, such as food, shelter, legal assistances, medical assistances, etc., to the destitute women, would not be con....