TaxTMI 
TaxTMI 
2023 (1) TMI 83
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....ihood enhancement of marginalized coastal communities including agriculture labourers, small and marginal farmers, fishermen, salt and charcoal makers belonging to schedule class and tribe. The activities include plantation of mangroves and other salt tolerant varieties of plants along the coastal belt and terrestrial regions of Gujarat. • Empowerment of women from economically and socially marginalized communities through organizing self-help groups and providing legal services to address domestic issues • Sanitation (Construction of toilets) and organizing solid waste management programmes by collecting and managing domestic waste. 1.2. The applicant has submitted the details of main objectives of the trust and the activities being carried out as under: Name of the Trust VIKAS Centre for Development Regd. Address 'Ishavasyam', Opp. Lajpatnagar Society, Eeshita Towers Road, Navjeevan P.O., Navrangpura, Ahmedabad 380 014 Status • Public Charitable Trust registered under Bombay Public Trusts Act, 1950. • Charity Commissioner :Trust Registration no. E3183, Ahmedabad dated 04/01/1978. • >12A Reg....
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.... better economic life for families engaged in fisheries. • Similarly, increased availability of fodder will help people engaged in animal husbandry. • The green wall created along 12 km long coastal belt would help in reducing salinity in the farm land along the coastal belt leading to better productivity in agriculture. Environmental benefits: • The mangrove plantation will lead to reduction of soil erosion and salinity ingress. • Absorption of the impurities including heavy metals improving the quality of the seawater. • Plantation leads to increase in green cover across the region improving the air quality. • The mangrove plantation would absorb 06 MT of Co2 annually per hectare of land area. i.e. 1200 MT of Co2 annually for 30 years. • The plantation would provide protection to life and domestic and industrial assets against natural calamities including cyclone, Tsunami, floods etc. Social benefits: • VIKAS CFD promotes marginalized community led planation. This increases awareness about the climate change and its impact. • This helps in reducing the vulner....
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.... (A) care or counselling of,- (I) terminally ill persons or persons with severe physical or mental disability; (II) persons afflicted with HIV or AIDS; (III) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or (B) public awareness of preventive health, family planning or prevention of HIV infection; (ii) advancement of religion, spirituality or yoga; (iii) advancement of educational programmes or skill development relating to,- (A) abandoned, orphaned or homeless children; (B) physically or mentally abused and traumatized persons; (C) prisoners; or (D) persons over the age of 65 years residing in a rural area; (iv) preservation of environment including watershed, forests and wildlife; 3.2 The applicant submits that the activities of the applicant relating to Afforestation, which includes plantation of mangroves are activities relating to "preservation of environment". 4. The applicant submits that a significant percent of global greenhouse gas (GHG) emissions is caused by forest destruction and poor agricultural practices. Boosting ....
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....inition of charitable activities as defined in clause 2(r) of the Notification No.12/2017-CT (Rate). The applicant is of the view that it being registered under Section 12AA of the Income-tax Act, 1961, become exempt from tax under the GST Acts, by virtue of Entry No. 1 of the Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 as mentioned above. 4.6 The applicant submits that the case is squarely covered under the Advance Ruling given by Authority for Advance Ruling under GST, Gujarat in the case of All India Disaster Mitigation Institute as reported at 2020 (36) GSTL.104 (A.A.R-GST-Guj) (Annexure-B) wherein it is held that activities related to 'disaster prevention', 'disaster mitigation' and 'disaster management' are activities relating to 'preservation of environment' as defined in clause 2(r) of Notification No.12/2017-C.T (Rate) and considered as charitable activities. In the present case, the activities being carried out by the applicant viz. plantation of mangroves arc directly related to 'disaster prevention' as it protects the environment from erosion by sea. It also protects the coastal areas from Tsunami and other kin....
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....usiness; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) services provided by a race club by way of totalisator or a licence to book maker in such club; and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities;" 5.3 Thus while the term "business" has been elaborately defined, except for a few activities which have been specifically incorporated, the activity should be in the nature of trade, commerce, manufacture, profession, vocation, adventure or similar activity in order to qualify as "business". 5.4 It is submitted that since the applicant is not engaged in "business", the transactions of the applicant are not "supply" transactions as defined under the GST Acts. Hence the applicant does not h....
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....d from Goodcarbon Impact GmBh for carrying out the Pilot Afforstation Project. The details submitted by the applicant is as under : The Flow of Funds is based on achieving the Key Milestones:- 1. An Advance amount is given to start the Project Work against Milestone-1. 2. When Milestone-1 is achieved, VIKAS CFD gives the Narrative Report and Financial Report of the Project. 3. The Milestone-2 money is then released. In case, there are surplus funds available after M-1, then M-2 Fund is released after deduction of the surplus funds on hand. In case, there is deficit of Funds, then explanation for the deficit to be given and the M-2 Fund is released. Then the same method of submission of narrative report for M-2 and the Financial Report is also presented Sr.No. Activity Action 1 Proposal of the Pilot Project sent to Funder. The Proposal includes the Financial Budget also. The Funder goes through the Project and understands the financials and then approves of the Pilot Project on actual expense basis. 2 VIKAS CFD signs a Service Agreement with the Funder (Goodcarbon Impact, GmbH, Germany) VIKAS CFD will impleme....
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....ification NO.12/2017-CT (Rate)? (ii) Whether the applicant is required to be get registered under GST? Personal Hearing: 8. Personal hearing granted on 26-09-22 was attended by Shri Rajesh I. Shah, Managing Trustee and he reiterated the submission. Further it is requested to submit the copy of agreement held between the applicant and foreign entity also the details of consideration received and expenses on implementation of plantation of mangroves work. Revenue's Submission: 9. Revenue has neither submitted its comments nor appeared for hearing. FINDINGS: 10. We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made by authorised signatory, during the personal hearing proceedings on 26-09-22 before this authority. We also considered the issue involved, on which advance ruling is sought by the applicant, relevant facts & the applicant's interpretation of law. 11. At the outset we would like to make it clear that the provisions of CGST Act and GGST Act are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. ....
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....edule-1 The Implementation Agency shall:- (i) prepare a master plan for implementation of the Pilot Projects development cycle; (ii) deploy an appropriate number of its trained and skilled personnel for undertaking implementation of the Pilot Project; (iii) undertake such acts, deeds and things as may be necessary for the successful implementation of the Pilot Project; (iv) provide a development cycle for the Pilot Project with key dates for relevant milestones and commercial requirements and prepare a final plan, which will form the basis and set out the standard operating procedure for the scaled up Project; (v) develop and maintain a good working knowledge of the various practical aspects of and documentation related to the Pilot Project; (vi) prepare and share progress/development reports periodically during the Term of this agreement; Schedule-3 KEY OUTPUTS FROM THE 200 HA PILOT PLANTATION PROJECT:- 1. This Pilot Project is designed to explore various plantation densities from 2,500 up to 10,000 plants per hectare. This will allow the Implementing Agency to identify the optimal plantation....
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.... Environment Mangroves have always been considered as exceptional ecosystems as in any case, mangrove forests create a wide diversity of niches, which serves as suitable habitats for feeding, breeding, spawning and hatching of sedentary and migratory species. In particular, they are important nursery habitat, for fish and crustaceans of commercial value. The mangrove play an important role in a sediment repository, stabilizes shoreline, a buffer against storm surges. The mangroves are resistant to much of environmental perturbations and stresses. Mangroves are also important for their role as an biological filters and a sink for several pollutants. With the advent and current acceleration of climate changes, mangroves are being increasingly seen as carbon sinks and carbon stores. Mangroves protect coastlines from wave energy and offshore ecosystems from terrestrial sediments flowing downstream. Mangroves are salt-tolerant forest ecosystems of tropical and subtropical intertidal coastal regions near river mouths. Mangrove form highly productive ecosystems since the inorganic nutrients, brought in by the incoming freshwater from land run-off are trapped to ....
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.... of,- (I) terminally ill persons or persons with severe physical or mental disability; (II) persons afflicted with HIV or AIDS; (III) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or (B) public awareness of preventive health, family planning or prevention of HIV infection; (ii) advancement of religion, spirituality or yoga; (iii) advancement of educational programmes or skill development relating to,- (A) abandoned, orphaned or homeless children; (B) physically or mentally abused and traumatized persons; (C) prisoners; or (D) persons over the age of 65 years residing in a rural area; (iv) preservation of environment including watershed, forests and wildlife; 15.4 We have already discussed in Para 15.1 to 15.3 the benefits of plantation of Mangroves along coastal and looking to the impact of plantation of mangrove on environment, social and economic, we hold that the activities of plantation of mangrove carried out by the applicant are covered under point (iv) of Charitable under clause 2 (r) of Notification No. 12/2017-CT (R) dated 28-6-2017....
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....or similar activity in order to qualify as "business". We find that the applicant service of afforestation which include plantation of Mangroves along with the coastline to protect the environment and up liftmen of socially and economically marginalized people as discussed in the above paras cannot be considered a business activity. The said activity have not been done for the commercial benefit but it is being carried out for social and economic benefit of the marginalized people and to protect the environment. 16. 4 The Invoicing and Payment Parameters for the year 2022-23 have been given in Schedule-2 of the Service Agreement. As per Schedule-2 the applicant would get total 198939/- Euro {Rs.169,09,815/- @ Conversion rate of 1 Euro = Rs.85} for the plantation of Mangroves. The applicant has submitted the flow of utilization of fund of Rs. 169,09,815/- in Excel Sheet "VIKAS CFD : PILOT AFFORESTATION PROJECT : ACTIVITIES AND PAYMENTS : PLANNING 2022-2025" and same is reproduced as under : VIKAS CFD : PILOT AFFORESTATION PROJECT : ACTIVITIES AND PAYMENTS : PLANNING 2022-2025 200 Ha. Pilot Plantation Budget (Amount in INR) Activities/Remarks Mode/System of Payment ....
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.... C Mangroves Nursery- Gap filling 1 Pilot Plot 1 - 50Ha. 2500 Plants 5.30 250 50 - 66,250 2 Pilot Plot 2 - 50Ha. 5000 Plants 5.30 500 50 1,32,500 3 Pilot Plot 3 - 50Ha. 7500 Plants 5.30 750 50 1,98,750 4 Pilot Plot 4 - 50Ha. 10000 Plants 5.30 1000 50 - 2,65,000 C 6,62,500 TOTAL-2 60,00,000 85,52,500 Payment to be done to Labourers against Gapfilling work, which includes replenishing the plants, weeding etc. Payment transfer to the Labourers on weekly basis based on the Payment Sheet received from the Field. The Payment is done through NEFT directly into the Beneficiary Account. 3 Plantation A Mangroves Plantation- 1st Year 1 Pilot Plot ....
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.... TOTAL- 3 75,00,000 106,90,000 Gapfilling of 1.25 lakh plants in 3rd Year Payment transfer to the Labourers on weekly basis based on the Payment Sheet received from the Field. The Payment is done through NEFT directly into the Beneficiary Account. 4 Supervision cost A Plantation Supervision 15000 2 36 3,60,000 11,91,600 Cost of 02 Persons to Supervise the Nursery Formation and Plantation and Gapfilling activity for 36 months. Monthly Project Salary given directly to Beneficiary Account on Monthly basis. B Caretaker for Site 10000 2 36 2,40,000 7,94,400 Cost of 02 Caretakers at the sight from the local community for 36 months Monthly Project Salary given directly to Beneficiary Account on Monthly basis. TOTAL- 4 6,00,000 19,86,000 5 Project Coordination & Monitoring A Project Manager Time 20000 1 36 2,40,000 7,94,400 Project Team On Mo....