2018 (11) TMI 1574 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL – 2019 (20) G. S. T. L. 119 (A. A. R. – GST) – Supply of Services or not – applicant is affiliated to International Inner Wheel and the administrative body for all Inner Wheel Clubs spread in 27 Inner Wheel Districts all over India – whether the activities undertaken by them may be termed “business” or not – Held that:- The Inner Wheel Clubs have specific objectives and members are granted various facilities and/or benefits, enabling them to attend conventions/meetings for the furtherance of the objectives of the Organisation, against subscriptions or fees, renewable annually – It appears that the fund collected is mainly spent on organising meetings and conventions like Triennial etc. Clearly, such meetings and gatherings provide facilities and benefits to the members in the form of a platform for social mixing, networking, promotion of friendship etc.
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The term “business” under the GST Act includes, under Section 2(
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6 under the category ‘Advertising services’.
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Sale of souvenirs is to be treated as a supply of goods.
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Ruling:- The Applicant’s activities involve supply of services classifiable under SAC Heading 99959 against consideration received in the form of subscription and membership fees.
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Services classifiable under SAC Heading 99836 are also supplied.
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Sale of souvenirs is to be considered as a supply of goods.
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The nature of supply for miscellaneous income as recorded in the Financial Accounts is to be determined by the nature of the supply. – Case No. 24 of 2018 Order No. 23/WBAAR/2018-19 Dated:- 26-11-2018 – VISHWANATH AND PARTHA SARATHI DEY MEMBER Present for the Applicant Vinay Kumar Shraff, Advocate 1. The Applicant, stated to be affiliated to International Inner Wheel and the administrative body for all Inner Wheel Clubs spread in 27 Inner Wheel Districts all over India (two of which fall within West Bengal), seeks a Ruling on whether the activities that ar
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ation is, therefore, admitted. 2. The Application states that the Applicant is affiliated to International Inner Wheel, one of the largest women s service voluntary organisations in the world active in more than 103 countries, and the organisation is involved in social welfare work with the aim of helping people live better lives. Members of the Clubs which fall under the Applicant organize events which combine personal service, fundraising, fellowship and fun, united by friendship and to serve the local community. They provide financial and other practical support to the financially disadvantaged classes, including people suffering from natural disaster or in war-torn regions. The club accumulates funds through subscriptions, sponsorship fees, the sale of souvenirs etc. The Application also states that if the Association dissolves the liabilities and assets will be distributed to other organisations having like objectives. The Clubs which fall under the Applicant do not provide any fa
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the GST Act defines the scope of supply as below: …..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; (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made or agreed to be made without a consideration; and (d) the activities to be treated as a supply of goods or supply of services as referred to in Schedule II. 4. The Application, as well as the literature subsequently submitted by the Applicant regarding the Constitution, workings and objectives of the International Inner Wheel and the Bye-Laws of the Association of Inner Wheel Clubs in India, the Applicant, does not provide for any import of services , nor for any of the supplies of goods or services, with or without consideratio
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itation Fees. It is also seen that each Club of Inner Wheel is required to pay the International Inner Wheel such Annual Capitation Fee for each member as shall be determined from time to time at the annual Convention, or, if in the years between, the inflation of the pound sterling makes a Capitation Fee increase necessary, the Governing Body is authorised to increase the Capitation Fee with the same percentage as the increase in the cost of living index in the UK, but not exceeding 5%. The Applicant, as a National Governing body of, and, being affiliated to the International body, is bound by these laws. And the Applicant s bye-laws also mention the annual subscription fees payable by each member. Voting rights are withdrawn from Clubs in arrears with dues. Similar requirements regarding Membership fees and/or subscriptions and voting powers are in the District Committee Rules as well as in the Club Rules. As per the information available in the public domain, members of Inner Wheel
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Club or District or the National Governing Body to the National Treasure. The Applicant s Income and Expenditure and Receipts and Payments Accounts for FY 18 and the Balance Sheet as on March 31, 2018, provide an idea of the nature of financial transactions made by the Inner Wheel Clubs. It appears that the fund collected is mainly spent on organising meetings and conventions like Triennial etc. Clearly, such meetings and gatherings provide facilities and benefits to the members in the form of a platform for social mixing, networking, promotion of friendship etc. 8. The term business under the GST Act includes, under Section 2(17), subclause (e) provision by a club, association, society, or any other body (for a subscription or any other consideration) of the facilities or benefits to its members. It is, thus, clear that the Applicant is doing business as defined under section 2(17)(e) of the GST Act. The subscription and membership fee is to be considered as consideration for the sup
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tions regarding these activities are, therefore, business transactions within the meaning of section 2(17)(b), being transactions undertaken in connection with or incidental or ancillary to the social welfare activities of the Applicant, and are supplies in terms of Section 7(1) of the GST Act. Such services are classifiable under SAC Heading 99836 under the category Advertising services . Sale of souvenirs is to be treated as a supply of goods. 11. The decision of the apex court in Sai Publication Fund (supra) is clearly not applicable in the present context, as the main activity is to be treated as a business. In view of the foregoing, we rule as below RULING The Applicant s activities involve supply of services classifiable under SAC Heading 99959 against consideration received in the form of subscription and membership fees. Services classifiable under SAC Heading 99836 are also supplied. Sale of souvenirs is to be considered as a supply of goods. The nature of supply for miscellan
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