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2020 (12) TMI 409 - AAR - GSTTaxability of GST - receipts being Grant in Aid (in the form of license fee) donations etc received from the Government of Himachal Pradesh for promotion of Tourism activities in the State - Government Entity - N/N. 32/2017-Central Tax (Rate) dated 13th October 2017 - HELD THAT - The said notification defines Government Entity as an authority or a board or any other body including a society trust corporation (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government with 90 percent or more participation by way of equity or control to carry out a function entrusted by the Central Government State Government Union Territory or a local authority. . Therefore The HP Tourism Development Board fulfils the criterion laid down for the Government entity as per Notification No 32/2017- Central Tax (Rate) because it has been established by the Government with 100% control to carry out the function of promotion and regulation of tourism activities in the state. The amount credited in favour of H.P Tourism Development Board by Department of Tourism Govt. of H.P as grant in aid or financial assistance is exempt under GST as per Serial No 9C of Notification No 32/2017-Central Tax (Rate) dated 13th October 2017.
Issues involved: Taxability of receipts like Grant in Aid, donations, and license fees received by the Tourism Development Board for promotion of tourism activities in the State under the Central Goods and Service Tax Act, 2017 and Himachal Pradesh Goods and Service Tax Act, 2017.
Analysis: 1. Background and Application: The M/s HP Tourism Development Board filed an application under section 97 of the CGST Act and HPGST Act regarding the taxability of receipts like Grant in Aid, donations, and license fees received from the Government of Himachal Pradesh for tourism promotion activities. 2. Clarification on Provisions: The Authority clarified that the provisions of the CGST Act and HPGST Act are similar, except for certain provisions. Any reference to the CGST Act would also apply to the corresponding provisions under the HPGST Act. 3. Facts of the Case: The Tourism Development Board receives amounts from various sources like sale of publicity material, parking fees, donations, and license fees. The Board argued that these amounts are grants-in-aid and not taxable under GST laws. 4. Request for Ruling: The applicant sought a ruling on whether the amounts credited by the Government as grants-in-aid to the Tourism Development Board are taxable. If taxable, the ruling was requested on the liability for tax payment. 5. Personal Hearings: Due to adjournments and the COVID-19 pandemic, personal hearings were conducted where the applicant reiterated their submissions and reframed questions for the ruling. 6. Discussion and Findings: The Authority considered the submissions and referred to Notification No. 32/2017-Central Tax (Rate) which exempts the supply of services by a Government Entity against consideration received from the Government in the form of grants. 7. Decision: The Authority ruled that the amount credited as grant in aid to the Tourism Development Board is exempt under GST as per the notification mentioned. The Board qualifies as a "Government entity" and fulfills the criteria for exemption. In conclusion, the judgment clarified the taxability of amounts received as grants-in-aid by the Tourism Development Board and provided a ruling based on the relevant provisions and notifications under the CGST and HPGST Acts.
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