GST on Charitable and Religious Trusts
GST Law and Procedure – GST Law and Procedure [January, 2019]
GST
Chapter Thirty Nine
GST on Charitable and Religious Trusts
'The provisions relating to taxation of activities of charitable institutions and religious trusts have been borrowed and carried over from the erstwhile service tax provisions. All services provided by such entities are not exempt. In fact, there are many services that are provided by such entities which would be within the ambit of GST.
GST exemptions for specified services supplied by charitable and religious trusts have been provided in notification No.12/2017-Central Tax (Rate) dated 28th June, 2017 S.Nos.1, 13 and 80.
Notification No.12/2017-Central Tax (Rate) dated 28th June 2017, S.No.1
This notification exempts services provided by entity registered under Section 12AA of the Income-tax Act, 1961 by way of charitable activities from whole of GST vide entry No. 1 of the notification, which specifies that
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nment including watershed, forests and wildlife.
Thus, services supplied by charitable trusts are exempt from GST only if following conditions are satisfied.
(a) Entities are registered under Section 12AA of the Income-tax Act, and
(b) Services or activities by the entity are by way of charitable activities as listed in the notification.
There could be many services provided by charitable and religious trusts which are not covered by the definition of charitable activities as given in the notification. Such services would attract GST. For instance, services of transportation of passengers for a pilgrimage or grant of advertising rights to a person on the premises of the charitable or religious trust or on publications of the trust or granting admission to events, functions, celebrations, shows against admission fee or ticket etc. would be leviable to GST:
Notification no.12/2017-Central Tax (Rate) dated 28th June, 2017, S.No.13
This notification exempts services supplied by a per
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f any religious ceremony is exempt from GST. The exemption is applicable to conduct of religious ceremonies ofall religions. Services other than by way of conduct of any religious ceremony such as granting rights to collect parking fee in the parking lot of the trust or granting photography rights in the premises against a fee or allowing advertisements on the premises of the religious place or in the publications of the trust shall be leviable to GST.
The notification also exempts renting of precincts of a religious place meant for general public owned by an entity registered under specified sections of the Income Tax Act subject to the consideration charged for such renting not exceeding the prescribed ceilings as given above.
'The term “religious place”, as defined in clause (zy) of the said notification, means “a place which is primarily meant for conduct of prayers or worship pertaining to religion, meditation, or spirituality”.
It has been clarified vide Circular No. 200/10/20
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emption is applicable to renting of precincts of religious places of all religions.
Activities other than conduct of religious ceremony and renting of precincts will be taxable irrespective of the manner or the name in which the consideration is received. For example, if donation is received with specific instructions or mutual understanding between the donor and the receiver that religious place will host an advertisement promoting business of the donor, such donation will be subject to GST. But if donation is received without such instructions or without a quid pro quo in the form of supply of any goods or services by the trust to the donor, it shall not be subject to GST.
Notification No.12/2017-Central 'Tax (Rate) dated 28th June 2017, S.No.80
This notification entry exempts services by way of training or coaching in recreational activities relating to:
(a) arts or culture, or
(b) sports by charitable entities registered under section 12AA of the Income-tax Act.
'Thus, servic
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an urban area by the Central Government or a State Government.
Import of Services : Any services received by charitable trusts registered under Section 12AA of Income-tax Act from a provider of services located outside India, for purpose of providing charitable activities are exempt from GST entry no. 10 of Notification no.9/2017-Integrated Tax (Rate) dated 28.06.2017 and the trust is not liable to pay GST on import of such services under reverse charge mechanism. However, this exemption shall not apply to online information and database access or retrieval (OIDAR) services received by charitable trusts. OIDAR services have been defined in section 2(17) of the IGST Act, 2017 and include services such as advertising on the internet, provision of e-books, music, movie, software, online gaming etc. However, compliance is not on the charitable trust under reverse charge.
Services by and to Educational Institutions (including institutions run by charitable trusts) : Activities of a school
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(4) services relating to admission to such institution or conduct of examination.
Educational institution has been defined as an institution providing services by way of,-
(i) pre-school education and education up to higher secondary school or equivalent,
(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;
(iii) education as a part of an approved vocational educational course;
“Approved vocational educational course” has been defined in clause (h) of paragraph 2 (Definitions) of the notification.
However, it may be noted that only such services as provided by an educational institution to its students, faculty and staff are exempt. Services provided to others such as renting of property (renting of book shops, canteen premises in school, renting of premises for holding a competitive examination) will be leviable to GST.
GST on arranging yoga and meditation camp by charitable trusts :As discussed above, servic
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aces by charitable trusts : Only such services of religious pilgrimage as are provided by Kumaon Mandal Vikas Nigam Ltd. or Haj Committee of India or a State Haj Committee constituted under the Haj Committee Act, 2002 in respect of a religious pilgrimage facilitated by the the Government of India, under bilateral arrangement, are exempt from GST. [Entry 60 of Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017]. Religious Yatras or pilgrimage organised by any charitable or religious trust are not exempt.
GST on running of public libraries by charitable trusts :No GST is applicable on activities of public libraries (including those run by charitable or religious trusts) by way of lending of books, other publications or knowledge-enhancing content/material. This activity has been specifically exempted by entry No. 50 of Notification No. 12/2017- Central Tax Rate dated 28th June, 2017.
GST on hospital managed by charitable trusts : Entry 74 of Notification No. 12/2017-Cen
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illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases.
This exemption is applicable to the services provided by a clinical establishment, an authorised medical professional or paramedics of a religious or charitable trust also.
Supply of food and beverages to the indoor patients as advised by the doctor/nutritionists is a part of composite supply of healthcare services and not separately taxable. Other supplies of food or drinks by a hospital to patients or their attendants or visitors would be taxable
Similarly, supply of services other than healthcare services such as renting of shops, auditoriums in the premises of the clinical establishment, display of advertisements etc. will be leviable to GST.
GST on services provided to charitable trusts : Services provided to charitable or religious trust
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