TMI Blog2018 (9) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... d equivalent provision of the Maharashtra Goods and Service Tax Act, 2017 so as to attract GST? Held that:- There is no doubt that applicant Trust is a person as defined u/s 2(84) of the GST Act - the applicant is engaged in Trade and Commerce by way of selling of goods and services and are very well covered under the definition of ‘business’ as given under Section 2(17) of the CGST Act and in view of this, their activities are very well covered within the scope of ‘supply’ as given in Section 7 of the CGST Act, 2017 and are therefore liable to tax as applicable in respect of goods supplied or services rendered. The applicant is registered under Section 12AA of the Income Tax Act but the activities being undertaken by the applicant in respect of services being provided by them are not covered under the definition of charitable activities - From the information provided by the concerned Officer/ Jurisdictional officer, we see that applicant trust generates income from sale of goods, provides for accommodation and foods in various Shibir/Satsang on payment/ chargeable basis, The Charitable Trust organize Shibir/Satsang for participant and they are not free for the participants, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shtra Goods and Service Tax Act, 2017? 2) Whether the applicant which is a charitable trust with main object of the advancement of religion, spirituality or yoga is liable to registration under the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017? 3) Whether sales of spiritual products which is incidental / ancillary to main charitable object of the applicant can be said to be business of the applicant in terms of the definition in Section 2(17) of the Central Goods and Service Tax Act 2017 and option provision Of Maharashtra Goods and Service Tax Act 2017? 4 Whether the sale of spiritual products can be said to be supply under Section 7 of the Central General Sales Tax Act, 2017 and equivalent provision of the Maharashtra Goods and Service Tax Act, 2017 so as to attract GST? 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 provision under the MGST Act. Further to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into force and the existing registered dealers under the erstwhile MVAT Act, 2002 were migrated to GST. 2.6 In reparation for implementing GST, the Commissioner of Sales Tax, Maharashtra issued Circular No. 357 of 2016 dated 12.11.2016 mandatorily requiring the existing registered dealers under the provisions of MVAT Act,2002 to enroll themselves for GSTIN. 2.7 Thus, the applicant was also migrated to the GST and Registration Certificate was issued to applicant on 22-09-2018 in Form GST REG-06 . Copy of the Registration Certificate is annexed herewith as Annexure - 5. 2.8 Though the applicant has been registered under GST, the applicant has not filed any returns since the applicant is not engaged in any business transactions amounting to supply liable to GST. Statement containing the applicant s interpretation of law and or facts as the case may be, in respect of the aforesaid question(s) 1. The Applicant is not carrying on business in terms of Section 2(17) of the CGST Act, 2017 1.1 The Applicant submits that the Applicant is not engaged in any of the business activity as defined under the Section 2(17) of the CGST Act, 2017. 1.2 The said Section 2(17) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic charitable trust carries out activity for advancement of its main object of charitable purpose, the same cannot be said to be business in commercial sense as defined in the taxing Statute, There is no motive to earn profit out of the said activities and profit earned if any is spent on the advancement of the general public utility and hence, there cannot be said to be any business which is carried out by the Public Charitable Trust. 1.8. Thus, in the present case also, the main object of the applicant being advancement of the religious and spiritual teachings Paramkrupalu Shimad Rajchandra, the applicant cannot be said to be carrying out business as defined in Section 2(17) of the CGST Act, 2017, 2. Once the main object of the applicant cannot be considered as business, the ancillary or incidental objects also cannot be considered as business. 2.1. The applicant submits that, once the main object of the applicant cannot be considered as business, the ancillary or incidental objects also cannot be considered as business. 2.2. The applicants submits that, it sells various spiritual products (Annexure - 6) such as Books, Audio CDs, DVDs, Statues, Calendars which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that Section 7 of the CGST Act, 2017 defines the scope of supply which is be 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, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. 3.2. From a plain reading of the above Clause (a) of Section 7(1) it is clear that supply will be liable to GST only when it is made for a consideration in the course or furtherance of business. 3.3 As submitted above, since the present case, the applicant is not carrying out any business, there can be no supplies liable to GST at the hands of the applicant. 4. Since the aggregate of taxable supplies of goods and services does not exceed Twenty Lakh Rupees, the applicant is not liable for registration under Section 22(1) of the CGST Act 2017. 4.1 The applicant submits that Section 22(1) of the CGST Act, 2017, provides for registration under the CGST Act, 2017. The said Section 22(1) is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f trade, commerce or manufacture Whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any gain or profit accrues from such trade, commerce, manufacture, adventure or concern; and any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern; and any transaction in connection with, or incidental or ancillary to, the commencement or closure of such trade, commerce, manufacture, adventure or concern; In this definition also the term Trade was there and Hon. Supreme Court has observed in para 17 as under about the meaning of trade : 17. This decision is directly on the point supporting the case of the respondent after noticing a number of decisions on the point including the decisions cited by the learned counsel before us. It may be stated that the question of profit motive or no profit motive would be relevant only where person carries on trade, commerce, manufacture or adventure in the nature of trade, commerce, etc. On the facts and in the circumstances of the present case irrespective of the profit motive, it could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be subjected to tax based on any other criteria. 8. Applicant submitted the details of main objectives of the trust and few sale of costing on 25.6.2018 as under: Name of the Trust Shrimad Rajcharcra Adhyatmik Satsang Saanana Kendra (SRASSK) Regd. Address Mumbai (Adm.) Add. Shrimad Rajchandra Ashram, Mohangadh, Dharampur -396050 Dist. Valsad Gujarat, India Bhupati Chambers, Third Floor, Plot - 13, Padmakar L Khandke Marg, Mathew Road, Opera House, Mumbai - 400004 Currently Trust has administrative office in Mumbai with a hall for prayer and for discourse to be given by Gurudev during group meetings. Registered with sales tax department due to deeming provision under MVAT Act but it was not regd. With GVAT as in Gujrat there was specific exemption for Charitable Trust not carrying any commercial activity. Status Charitable Religious Trust regd. u/s 12AA of the Income Tax Act, since last 23 years and with charity Commissioner Gujrat. Trust does not have any computation of business income. Object of the Trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ang Booklets, Magazine etc. Nature of Products Cost thereof Ref. to the object clause Cost per Unit Rs. Sale Per Unit Rs. SHRIMAD RAJCHANDRA VACHANAMRUTJI (IN GUJ) Scriptures commandments of Shrimad Rajchandraji Fundamental objectives -Spiritual 228.88 225.00 PUSHPMALA Booklet of Do s Don ts (Practice booklet by Shrimad Rajchandraji Fundamental objectives -Spiritual 14.92 15.00 SADGURU ECHOES Monthly Magazine Other objectives - Activities for spreading the knowledge. 43.94 35.00 VIVEKCHUDAMANI SHIBIR - 11-DVD Discourse by Gurudev on selected Granth/Scripture (Full one year set will include 12 DVD) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets. The year wise details are as under- Financial year 2016-17 2015-16 2014-15 Furniture Fixture Addition during year 1100992/- 4273725/- 1768859/- Sale during the year 641009/- 1650006/- 1723291/- Equipment Addition during year 8514707/- 6072185/- 2686859/- Branch Transfer 0 0 52000/- Sale during the year 586114/- 1792741/- 172329/- Computers Addition during year 397493/- 470493/- 136985/- Sale during the year 220500/- 0 18383 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable to compulsory registration in certain cases 4. Compulsory registration in certain cases - Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act, - (i) Persons making any inter-State taxable supply; (ii) Casual taxable persons making taxable supply; (iii) Persons who are required to pay tax under reverse charge ; (iv) Persons who are required to deduct tax under section 51, whether or not separately registered under this Act ; (v) such other person or class of persons as may be notified by the Government on the Recommendations of the Council. In view of the above provisions under section 22, 23 and 24 the above Charitable Trusts is liable to Registration under the provisions of Central Goods and Service Tax Act 2017 and Maharashtra Goods and Service Tax Act, 2017. 3) Whether sales of spiritual products which is incidental / ancillary to main charitable object of the applicant can be said to be business of the applicant in terms of the definition in Section 2(17) of the Central Goods and Service Tax Act 2017 and option provision of Mahar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... values along with their further written submissions. They requested that they want to make further submissions and requested that a date for further submissions till 25.06.2018 may be granted to them. Their request was granted. Jurisdictional Officer Sh. Vikrant Gaikwad, Asstt. Commr. Of State Tax (D-836), Nodal -3, Mumbai appeared and made written submissions. Sh. C. B. Thakkar, Advocate made further written submissions as per their request on 25.062018. 05. OBSERVATIONS We have gone through the facts of the case.it is observed that thus, 1. Shrimad Rajchandra Adhyatmik Satsang Sadhana Kendra (hereinafter referred to as applicant ) is a public charitable and religious trust engaged in advancement of the teachings of Param krupaludev Shrimad Rajchandra and spreading the knowledge of Jain Religion entrusted by Shri Mahavir Swami and other Tirthankars. 2. Applicant submitted that the main object of the applicant trust is to spread the knowledge of the Jain Dharam and advancement of teachings of Param krupaludev Shrimad Rajchandra. 3. Applicant further submitted that the ancillary and incidental objects of the applicant trust are to carry out activities for adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We are first required to ascertain as to whether the applicant is carrying out any business or not. We find that as per details above business is defined under GST Act under Section 2(17). As per this definition we are required to have a relook at details as given under sub clause (a), (b) and (c) of Section 2(17) which states that business includes:- (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; In reference to the above, we find that the word trade as per Dictionary has meanings as under:- As a noun it means -----the buying or selling of goods or services between people or countries. -----a particular type of business. As a verb it means -----to buy or sell goods or services. -----to exchange something for something else. As per Collins Dictionary, trade is an activity of buy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Trust Deed translated in English submitted by them. Trust Deed Para 5, --- This Trust is created as Public Charitable and Religious Trust and the said Trust shall the known as Shrimad Rajchandra Adhyatmik Satsang Kendra and the Trustees shall give the said name to the Trust and manage the Trust by the said name and they shall administer, make disposition and use the property as per this Trust Deed. Para 7- The party of the second part, the Trustees, shall make disposition and investment of the aforesaid property as follows: The aforesaid Trust Property can be invested in the investments approved under the. The Bombay Public Trust Act, 1950 and The Income Tax Act, 1961 and the immovable and movable properties and the income thereof can be used in the Trust. Subject to the prevailing law, the Trustees shall have absolute authority to buy the securities and to sell the purchased securities and to buy other securities from out of the sale proceeds of the securities or to transfer or to exchange the same and if the company issues new rights shares against the previous shares, then to buy the shares by taking money in respect thereof from the Trust Properties . And the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riptures and religious books for the education of such kind of knowledge which Trustees may deem proper for the activity of the welfare of all the human beings and for its expansion etc. and to establish such institutions which may be deemed proper and to run the classes or to extend financial help such knowledge giving institutions and to financially help such pupils are recommended by the Trust or besides pupils. Even such persons who are fit to take such knowledge, by making provision in writing as per the law to admit and educate them in such institution (3) Activities for the kindness to all living beings To carry out activities for the kindness to all living beings such as to stop the beasts and birds taken to slaughter house, to free them from there, to rear them in Panjrapol, birds asylums etc. for the endurance of their lives after releasing them from there. No portrait, photo, statue, symbol, plaque, monuments, Samadhi , museum or anything or article, except of Shree Vitrag Prabhu and Most Compassionate Shrimad Rajchandraji and the persons associated with the incidents occurred during HIS life-time, also existing Sadgurudev Pujya Gurudevshri Rakeshbhai Zaveri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made or agreed to be made without a consideration; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. (2) Notwithstanding anything contained in sub-section (1).-- (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be 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. In view of the above detailed discussions it is very apparent that the applicant is engaged in Trade and Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om sale of goods, provides for accommodation and foods in various Shibir/Satsang on payment/ chargeable basis, The Charitable Trust organize Shibir/Satsang for participant and they are not free for the participants, as the trust charge some amount from the participants in the name of accommodation or participation. Satsang is the only activity provided by the applicant free of cost to the participant. As such arranging residential or non-residential Satsang /Shibir/yoga camps by accepting/charging some amount from the participants will not be covered under charitable activities within the meaning of definition provided at Definitions at 2 (r) of notification No. 12/2017 Central Tax (Rate) dated 28/06/2017 of the expression charitable activities and in particular advancement of religion, spirituality or yoga. Applicant has submitted different case laws mention of which is already made herein above. Since we have come to the conclusion that the activities carried on by the applicant is in the nature of business as defined u/s 2(17) of the GST Act and further considering the GST Regulations that all services provided by the religious trusts and charitable institutions are not exe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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