2023 (1) TMI 83 - AAR - GST

Exemption from GST - activity of Afforestation, which includes the plantation of mangroves - Charitable activities or not - Sr. No.1 of Notification NO.12/2017-CT (Rate) - Whether the applicant is required to be get registered under GST? - HELD THAT:- The applicant has undertaken the project of afforestation which include plantation of Mangroves covering 200 hectare area along coastal belt of Jambusar taluka, Bharuch district, Gujarat. Mangroves are one of the earth's most important ecosystems and serve many critical functions: buffering coasts from storm surges, preventing coastal erosion, filtering water, storing carbon, serving as a vital habitat for a great number of species, and providing food and livelihoods for local communities. Planning Commission, New Delhi has published report of the Task Force on “ISLANDS, CORAL REFS, MANGROVES & WETLANDS IN ENVIORNMENT & FORESTS” For the Eleventh Five Year Plan 2007-2012. Chapter-3 of the report has elaborated causes of depletion of Mangroves, benefits of plantation of Mangroves on Environment, Economic and social aspect.

The benefits of plantation of Mangroves along coastal and looking to the impact of plantation of mangrove on environment, social and economic, it is held that the activities of plantation of mangrove carried out by the applicant are covered under point (iv) of Charitable under clause 2 (r) of Notification No. 12/2017-CT (R) dated 28-6-2017 as amended.

Determination whether activity of the applicant covered under Supply defined under Section 7 of CGST Act, 2017 - HELD THAT:- The applicant service of afforestation which include plantation of Mangroves along with the coastline to protect the environment and up liftmen of socially and economically marginalized people as discussed in the above paras cannot be considered a business activity. The said activity have not been done for the commercial benefit but it is being carried out for social and economic benefit of the marginalized people and to protect the environment.

The applicant activity of plantation of Mangrove are covered under Charitable Activity as defined under Clause 2( r) of the Notification No. 12/2017-CT (Rate) dated 28-6-2017. The applicant is registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) as Charitable Trust, thus service of plantation of Mangroves by the applicant is eligible for exemption from the payment of GST and covers under entry No. 1 of the Notification No. 12/2017-CT (Rate) dated 28-6-2017 - the applicant service of plantation of mangrove is covered under point (iv) of Charitable Activity define under clause 2 (r) of Notification No. 12/2017-CT (R) dated 28-6-2017 as amended and is eligible for exemption from payment GST in terms of entry No. 1 of Not. No. 12/2017-CT (Rate) dated 28-6-2017.

The applicant service does not covered under supply as defined under Section 7 of CGST Act, 2017, therefore, applicant is not liable for registration under the provisions of Section 22(1) of the CGST Act, 2017.