In Re: Shrimad Rajchandra Adhyatmik Satsang Sadhana Kendra
GST
2019 (1) TMI 25 – APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – 2019 (20) G. S. T. L. 779 (App. A. A. R. – GST), [2019] 65 G S.T.R. 21 (AAR)
APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – AAAR
Dated:- 24-12-2018
MAH/AAAR/SS-RJ/14/2018-19
GST
SMT. SUNGITA SHARMA, AND SHRI RAJIV JALOTA, MEMBER
PROCEEDINGS
(under Section 101 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act.
The present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Ac
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and public in general and to set up organizations for helping people. The ancillary object also includes protecting birds and animals from being killed in slaughter houses, and other activities.
D. The Appellant was registered under the erstwhile Maharashtra Value Added Tax Act, 2002 in view of the specific Explanation in the definition of “dealer” under Section 2(8) of the MVAT Act, 2002.
E. With effect from 1.7.2017, the Goods and Service Tax was brought into force and the existing registered dealers under the erstwhile MVAT Act, 2002 were migrated to GST. In preparation for implementing GST, the Commissioner of Sales Tax, Maharashtra issued Circular No. 35T of 2016 dated 12.11.2016 mandatorily requiring the existing registered dealers under the provisions of MVAT Act, 2002 to enroll themselves for GSTIN.
G. Thus, the Appellant was also migrated to the GST and Registration Certificate was issued to Appellant on 22-09-2018 in Form GST REG – 06.
H. Though the Appellant has been re
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ppellant in affirmative and against the Appellant.
L. Being aggrieved by the said advance ruling, the appellant is filing the present appeal before Appellate Authority.
Grounds of Appeal
The Advance Ruling Order has been passed without considering all the submissions of the Appellant.
1. The Advance Ruling Authority has not considered the main and the incidental objects of the Appellant trust to determine whether the same amounts to business in view of the definition of the “business” under Section 2(17) of the CGST Act, 2017. The appellant had specifically submitted that the activity of the appellant involves supply of products at cost or lower than cost to advance its incidental and ancillary objects. The said facts though noted by the Id. Advance Ruling Authority, has not been discussed in the findings of the ARA.
2. The Appellant further submits that Advance Ruling Authority has discussed the exemptions under the GST laws which does not pertain subject matter of the questions
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n the subject matter of the questions raised by the Appellant. The said judgments of the Supreme Court, if not binding as precedents, are driving authorities to decide the questions raised by the Applicant.
5. Ld. ARA has observed that the said precedents are on different context and hence cannot be considered or relied upon in the facts of the present case.
6. The Appellant submits that, the Ld. ARA has made no attempt to distinguish the said precedents in the body of the Order even on the facts of the case. It is settled law that mere passing of order without reasoning is a non-speaking order and hence not tenable in law or binding on the Appellants.
7. The Appellant submits that they are not engaged in any of the business activity as defined under the Section 2(17) of the CGST Act, 2017.
8. The said Section 2(17) is reproduced below for ready reference:
(17) “business” includes-
(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar
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ment, a State Government or any local authority in which they are engaged as public authorities;
9. The Appellant submits that, the business definition is an inclusive definition and has various specific clauses to be included in the definition of business.
10. The main clauses relevant for the present application are as Clause (a) and Clause (b). The Appellant submits that other clauses are not applicable in the facts of the present case.
11. Clause (a) provides that any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit shall be included in the definition of business.
12. The Appellant submits that in the present case, the Appellant is a public charitable trust with the main object of advancement of religious and spiritual teachings and not engaged in any trade, commerce, manufacture, profession, vocation adventure, wager or any other similar activity. Further, the Appellant does not get
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ness, the ancillary or incidental objects also cannot be considered as business.
16. The Appellants submits that, it sells various spiritual products such as Books, Audio CDs, DVDs, Statues which are for the advancement of the religious teachings of the Paramkrupalu Shrimad Rajchandra. The said books give in-depth study of the teachings of Gurudev and are only for spreading the religious message. The DVDs and CDs are recorded pravachan, satsang, spiritual songs and bhajans for those who cannot be personally present at the events.
17. The Appellant further submits that, the said products are sold at cost or less than cost. The costing and the selling price of the illustrative products has already been submitted by the Appellant before the Ld. ARA and noted in the impugned order.
18. Thus, the Appellant submits that, the Appellant cannot be said to be carrying out business even for the publications being sold by the Appellant to the devotees of Paramkrupalu Shrimad Rajchandra.
19. Th
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the trust is charitable, then any other object which might not be charitable but which is incidental or ancillary to the dominant object will also be considered as charitable.
21. In view of the settled legal provision, the Appellant in the present case also cannot be considered as carrying on business even for the ancillary and incidental activity of selling the spiritual products.
Since, the Appellant is not engaged in the carrying out business activity, the Appellant cannot be said to be making supplies liable for GST.
22. The Appellant submits that Section 7 of the CGST Act, 2017 defines the scope of supply which is liable for GST. The relevant portion of said Section 7 is extracted below for ready reference:
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, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course
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ver in a financial year exceeds twenty lakh rupees:
Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.
27. In the present case, the Appellant submits that, the Appellant does not make any taxable supplies so as to be liable for registration under the provisions of Section 22(1) of the CGST Act, 2017.
28. Further, since the Appellant is not engaged in carrying out business as defined under Section 2(17) of the CGST Act, 2017, the other provisions and rigors of the CGST Act shall not be applicable to the Appellant.
Personal Hearing
The case was fixed for hearing on 20.11.2018. Shri C B Thakar (Advocate) attended the hearing on behalf of the appellant. He stated that the appellant is a public charitable trust and is formed to spread the teachings of Paramkrupaludev Shrimad Rajchandra. The activities are do
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the ARA that the trust is liable to registration under the provisions of CGST Act.
It is seen from the ARA and from the grounds of appeal that the main argument advanced by the appellant is that they are not carrying on the business in terms of section 2(17) of the CGST Act. The said definition is reproduced above in grounds of appeal.
With reference to the above definition, the appellant has contended that it is a public charitable trust with the main object of advancement of religious and spiritual teaching and is not engaged in any trade, commerce, manufacture, profession, vocation, wager or in other similar activities. Also, it is put forth by the appellant that as the main object cannot be considered as business, the ancillary or incidental object also cannot be considered as business. The incidental activity as per the appellant is that it sells various spiritual products such as books, audio CDs, DVDs, statutes, calendars etc. which are for the advancement of the religious ob
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ces to the people desiring to buy them and such an activity by itself forms a part of the objective of the trust. Under the heading – 'OTHER OBJECTIVES OF THE TRUST' and the heading 'ACTIVITY OF SPREADING THE KNOWLEDGE' the trust has printing and publishing as one of the objectives of the trust. In the various objectives of the trust listed it is also seen that the trust can dispose its property, buy and sell securities, sell the trust property by public auction or let it out on lease etc. Therefore, we see from the above objectives of the trust that though it is public charitable religious trust by name, activities of trade and commerce also form a major part of the objectives of the trust. We do not agree with the contention of the appellant that there is main activity and incidental activity in the said case. The main activity or object of the trust includes trade and commerce and as the definition of 'business' under the CGST Act includes the words 'trade and commerce' it can be sa
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notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services.
(3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as-
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.
The appellant sells goods and services for consideration and its various activities come within the ambit of definition of 'supply', We have already held forth as how the appellant can be said to be engaged in the business. Therefore, the said supply of spiritual products like books, CDs and DVDs are in the nature of supply in the course of business.
It is seen that the Notification No. 12/2017 dt.28 June, 2017 under CGST Act exempts services provided by the entity registered u/s. 12AA of the Income Tax Act, 1961, by way of charitable activities f
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seen that certain services supplied by charitable trust are exempt from GST. A CBIC flier on 'GST on Charitable and Religious Trust' explains the scope of charitable activities which are exempted from levy of GST. It is clarified in the said flier that services of transportation of passengers, granting of advertisement rights, publication of the trust admission to event, all will be leviable to GST. There are also other notifications under CGST Act which provide specific exemption to certain services by charitable trusts. Entry No. 10 of the Notification No.9/2017, dt.28.06.2017 under IGST Act, exempts the services received by charitable trust registered u/s.12AA of the IT Act, 1961, from the provider of services located outside India and the trust is not liable to pay GST on import of such services under Reverse Charge Mechanism. However, the exemption is not extended to OIDAR services received by charitable trust. There is also a specific exemption on services provided by charitable
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business' or 'taxable person'. The very fact that certain services have been carved out and given out a special treatment makes it clear that all trade and commerce transaction of selling books, statutes, CDs and DVDs etc. done commercially for consideration come within the broad ambit of 'business' under the CGST Act.
In the grounds of appeal, it is contended by the appellant that the ARA has not taken cognizance of the Supreme Court judgment in the case of Sai Publication (Appeal No.9445 of 1996 dt.22.03.2002) = 2002 (3) TMI 45 – SUPREME COURT. The said judgment is given under the provisions of the BST Act, 1959, and the definition of 'business' in the said Act is different from the definition under CGST Act. The definition under the CGST Act is wider than the one under the BST Act. Also the background of the Act and the structure of the statute which includes not just the Act but also the Rules, schedule and notification have to be considered. We have already discussed the various
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