In Re: The Association of Inner Wheel Clubs in India
GST
2018 (11) TMI 1574 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL – 2019 (20) G. S. T. L. 119 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, WEST BENGAL – AAR
Dated:- 26-11-2018
Case No. 24 of 2018 Order No. 23\/WBAAR\/2018-19
GST
VISHWANATH AND PARTHA SARATHI DEY MEMBER
\nPresent for the Applicant Vinay Kumar Shraff, Advocate
\n1. 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 are undertaken by them maybe termed as “business” and “supply of services” as defined under the WBGST\/CGST Act, 2017 (hereinafter referred to as “the GST Act”).
\nUnder Section 97 of the GST Act, Advance Ruling cannot be pronounced on the determination and definition of “business”.
\nThe question regarding whether or not the activities <\/p>\n
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\nMembers 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.
\nThe Application also states that if the Association dissolves the liabilities and assets will be distributed to other organisations having like objectives.
\nThe Clubs which fall under the Applicant do not provide any facility or benefit to any of its members. The subscriptions\/membership fees collected from the members are utilised entirely for funding charitable work.
\nThe Applicant submits that although funds are collected through sponsorship fees, advertisements, sale of souvenirs etc, such activities do not fall within t<\/p>\n
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\n(b) import of services for a consideration whether or not in the course or furtherance of business;
\n(c) the activities specified in Schedule I, made or agreed to be made without a consideration; and
\n(d) the activities to be treated as a supply of goods or supply of services as referred to in Schedule II.”
\n4. 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 consideration, as enumerated in Schedules I and II.
\nThe activity of the Applicant, therefore, is to be considered in the light of Section 7(1)(a) of the GST Act.
\n5. Upon careful perusal of the documents as mentioned above, it is seen that there are well laid down objectives of the Applicant, as well<\/p>\n
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\nThe 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.
\nSimilar requirements regarding Membership fees and\/or subscriptions and voting powers are in the District Committee Rules as well as in the Club Rules.
\nAs per the information available in the public domain, members of Inner Wheel Clubs can access various programmes including those in the UN, a privilege not available to non-members.
\n6. It is thus, clear, from the above reads that the Inner Wheel Clubs have specific objectives and members are granted various facilities and\/or benefits, enabling them to atte<\/p>\n
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\nIt 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.
\n8. 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.
\nThe subscription and membership fee is to be considered as consideration for the supply of such services, which are classifiable under SAC Heading 99959 under the category 'Services furnished by other membership organization'.
\n9. The Application also states that the Inner Wheel Clubs falling under the Applicant take part in a wide range of work for cha<\/p>\n
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\nSuch services are classifiable under SAC Heading 99836 under the category 'Advertising services'.
\nSale of souvenirs is to be treated as a supply of goods.
\n11. 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.
\nIn view of the foregoing, we rule as below
\nRULING
\nThe Applicant's activities involve supply of services classifiable under SAC Heading 99959 against consideration received in the form of subscription and membership fees.
\nServices classifiable under SAC Heading 99836 are also supplied.
\nSale of souvenirs is to be considered as a supply of goods.
\nThe nature of supply for miscellaneous income as recorded in the Financial Accounts is to be determined by the nature of the supply.
\nThis Advance Ruling is valid subject to the provisions under Section 103(2) until and unless declared void under Section 104(1) of the GST Act.
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