AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2023 (4) TMI 582
X X X X Extracts X X X X
X X X X Extracts X X X X
....officer in respect of the applicant. 3. In terms of Section 103(2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed. 4. In terms of Section 104 of the Act, where the Authority finds that advance ruling pronounced by it under sub-section (4) of Section 98 or under sub-section (1) of section 101 has been obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the applicant as if such ruling had never been made. 5. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. The applicant M/s United Planters Association of Southern....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lanters of southern region and requirement to have welfare association to put forth their troubles and requirements collectively before the Government and various authorities. Also helps among them to improve plantation activities in order to achieve maximum productivity and quality. 2.3 UPASI is running for welfare of its members by way of conducting analytical and research to improve the plantation activities by its members, inventing new crops by horticultural research for its members and their benefits, conducting soil, tea quality test and such other agricultural tests for its members to do effective plantation and growing activities, representation before various authorities for the benefit of its members. Apart from the said activities, the membership subscription fee received is utilized for conducting meetings and to meet out necessary running and administrative costs of the institution. 2.4 Under its by-laws, subscription amounts payable from its members are as fixed by the Executive Committee of the applicant, unless otherwise determined by the General Meeting of the applicant. The applicant prevents a member from voting or standing for election if the member is in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enses of the applicant association for the welfare of members. 2.9 The applicant relied on the definition of "Supply" under section 7 of GST Act, 2017 and insist that the applicant association and its members are one and the same, as amount received from oneself cannot be treated as consideration. They further state that the applicant association is neither a related person nor a distinct person from its members, thus GST cannot be levied under section 9 of CGST Act, 2017 as there is no supply under Section 7 CGST Act, 2017. 3.1 The applicant was given an opportunity to be virtually heard on 15.06.2022. The authorized representative (AR) Sri D. Sethuraman, Chartered Accountant appeared before the authority and reiterated the submissions made. When asked about the difference between annual membership and one-time fee of current and retired members, the AR replied that the rate is per hectare. The AR was asked to submit detailed write-up on their structure, roles, and activities; Balance sheet and accounts relating to membership fees; pattern of membership fee charged; registration certificate under Societies Registration Act and membership fees collected substantiated with doc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons relating to plantation commodities; Interacting with Commodity Boards to orient decisions/action of the Boards to be conducive to the growth of the planting industry; Analyzing international trends in the plantation commodities covered by UPASI and suggesting appropriate approach change to the planters; Overseeing/Coordinating the activities of the Tea Research Institute, Krishi Vigyan Kendra, Advisory Services etc. of Government of India • Appreciating the fact that Research is the backbone of development, tea planters of South India set up a Tea Research Institute (TRI) in Tamil Nadu as early as 1936. TRI became a full-fledged Research Institute, headed by experienced and qualified Research Scientists. • Appreciating the good work of the Tea Research Institute, Tamil Nadu Government allotted 90 acres of land near the Institute for conducting experiments on Tea Cultivation. This was followed by Tea Board obtaining another 90 acres land from the State Government and allotting the same to the Research Institute for experiments. 3.2.2 In the "Note on Subscription", it is stated that,- • As per bye-Law 11(1) of UPASI, definition for subscr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation industry. An amount of Rs. 3000/- is collected as Firm Member annual subscription. • Association Member subscription are collected from various other Association who use the affiliated services through UPASI. An amount of Rs. 250/- is collected as Association Member annual subscription. • Provision of becoming a Retired planter member is open to persons retiring from the Plantation industry and having specific interest in plantations. Rs.50/- is collected as annual subscription from such members. These members also have the option of taking a life time membership by paying one-time fee of Rs. 1000/- per member. 3.2.3 The Income & Expenditure account is maintained separately for UPASI and Tea Research. In the Income &, Expenditure account of UPASI for the year ended 31.03.2021, income received towards Subscription is grouped under Firm Members, Association Members, Retired Planter Members, Small Grower Members, Pepper Members and Estate members. Subscription income from Estate Members constitutes 96.57% of the total subscription income. As per the Income & Expenditure account of Tea Research for the year ended 31.03.2021, 51% of the gross income is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Section 97(2)(b) and 97(2)(g) respectively of GST Act 2017. However, question numbers 2, 3 and 4 seeks interpretation of GST law with respect to doctrine of mutuality and relationship of applicant association with its members. The said interpretation of law is not mandated to Advance Ruling Authority for ruling under Section 97(2). Therefore, we refrain from interpretation of law sought in questions 2, 3 and 4 and hence no ruling on the same. 6.2 The question which needs to be answered is whether the applicant is eligible to avail the benefit of Notification No. 14/2018 CT dated 26.07.2018 as a registered non-profit association engaged for the welfare of farmers under Serial number 77A and whether there is a transaction between the applicant association and its members which is covered under Section 7(1) (a), (c) or (d) of the GST Act, 2017. 7.1 It is seen from the submissions enumerated in para 3.2.1 supra that the applicant is an apex body of planters of tea, coffee, rubber, pepper and cardamom in the Southern States of India viz. Tamil Nadu, Kerala, and Karnataka in existence since 1893. There are 3 State Planters' Associations and 13 District Planters' Association....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act, 2019 as "farmer" means a person, who is engaged in production of agricultural produce or rearing of livestock by himself or by hired labour or otherwise, including lessee, tenant and sharecropper"; "agricultural produce" includes all produce, whether minimally processed or not, of agriculture, horticulture, apiculture, sericulture, or forest / or any other such activity as specified in the Schedule to this Act". • UPASI is a welfare association of planters and all the members are growers and planters engaged in the production of agricultural produce such as Tea, Coffee, Rubber, Pepper, Cardamom etc., and all the members are coming under the category of formers and therefore it is well eligible to avail the benefit of Notification No. 14 / 2018 - Central Tax (Rate) dated 26th July, 2018. • An incorporated members' association such as the applicant-association is neither a person distinct from the member nor a related person. Consequently, the issue of consideration does not arise as an amount received from oneself cannot be treated as consideration. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ia or outside India; (g) any corporation..;...;......; ....................... (I) society as defined under the Societies Registration Act, 1860; (m) trust; and (n) every artificial juridical person, not falling within any of the above; 8.2.2 As per Section 20 of the Societies Registration Act, 1860, the following societies may be registered under this Act:- Charitable societies, the military orphan funds or societies established for the promotion of science, literature, or the fine arts, for instruction, the diffusion of useful knowledge, -[the diffusion of political education], the foundation or maintenance of libraries or reading rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collections of natural history, mechanical and philosophical inventions, instruments, or designs. 8.2.3 The applicant has stated that they are registered under the Tamil Nadu Societies Registration Act, 1975 and submitted a copy of certificate of registration for registration under the Societies Registration Act, 1860, on 03.07.1963. From the above statutory provis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ective amendment of Section 7 by insertion of clause (aa) to sub-section (1) and explanation with effect from 01.07.2017, which states that the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another. 8.4.1 Notification No. 14/2018 Central Tax (Rate) dated 26th July 2018 amended Notification No. 12/2017 Central Tax (Rate) dated 28th June 2017 by inserting serial number 77A that exempted services provided by an unincorporated body or a non-profit entity registered under any law for the time being in force, engaged in,- (i) activities relating to the welfare of industrial or agricultural labour or farmers; or (ii) promotion of trade, commerce, industry, agriculture, art, science, literature, culture, sports, education, social welfare, charitable activities and protection of environment, to its own members against consideration in the form of membership fee up to an amount of one thousand rupees (Rs 1000/-) per member per year. 8.4.2 The applicant contended that they are welfare association of planters and all the memb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ecognized by law, but qualify as a farmer. However, the exemption notification mandates welfare of industrial or agricultural labour or farmers. Here, welfare of labour or farmers refers to natural persons following the doctrine of ejusdem generis. Therefore, the exemption is applicable to natural persons who are farmers simpliciter and the annual subscription for all membership, under various nomenclature, is up to Rs.1,000/-. 8.5 Summing up, we conclude and hold that as per the provisions of GST Law, the applicant being a registered society, providing services to their members, who are distinct from the applicant and registered as member on payment of any amount towards subscription/contribution, is a supply of service and is accordingly taxable except subscription received from natural persons who are farmers simpliciter and the annual subscription for all membership is up to Rs. 1000/-. 9. The applicant in their submissions has relied upon the ruling in the case of "Rotary Club of Mumbai Nariman Point" of the Maharashtra Appellate Advance Ruling Authority wherein it was held that club, as per the facts put up, does not render any "Supply" for the purposes of the GST Act a....