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TMI Blog2018 (9) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... n, 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 earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular 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) is reproduced below for ready reference: (17) "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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 extracted below for ready reference: 22. (1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees: Provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n; 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 said that the trust either was a "dealer" or was carrying on trade, commerce, etc. The trust is not carrying on trade, commerce, etc., in the sense of occupation to be a "dealer" as its main object is to spread the message of Saibaba of Shiridi as already noticed above. Having regard to all aspects of the matter, the High Court was right in answering the question referred by the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Extract from the Trust Deed (In English) Para no. 8) Objectives of the Trust Fundamental objectives of the Trust - Spiritual Activities The fundamental objectives of this Trust is to carry out, get carried out and support spiritual activities such as 'Satsang' (association with saints or gentlemen), worshiping and meditation for the final salvation in such a manner that the persons from all castes desirous of salvation attains salvation and their unique devoutness to Eternal 'Vitrag' Path Leading, Most Compassionate Pramkrupalu Shrimad Rajchandraji increases by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SHIBIR -11 MP3 Discourse by Guru dev on selected Granth/Scripture (Full one year set will include 12 MP3) Other objectives - Activities for spreading the knowledge. 89.19 75.00 03. CONTENTION - AS PER THE CONCERNED OFFICER AS BELOW. The dealer was a registered dealer under MVAT ACT 2002 having Constitution of the Business Public Trust and the Business Activity - Trading. The dealer have effected interstate purchases as well as Branch Transfer. The dealer have also deducted TNCT TDS in 2013-14 & 2015-16. 1) Whether the applicant which is a charitable trust with the main object of advancement of religion, spirituality or yoga can be said to be in business so as to attract the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017? Please refer the Explanation Note issued to the Notification No-12/2017-Central Tax (Rate) dated 28th June 2017 by Directorate General of Tax payer Services Central Board of Excise and Customs. The Notes states - GST on supply of goods by Charitable Trusts - "There is no exemption for supply of goods by Charitable Trusts. Thus any goods supplied by such Charitable Trusts for consideration shall be l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upposed to sale/ supply under GST Act) and year wise turnover in previous years is as under Financial Year Amount 2016-17 4359967/- 2015-16 4972259/- 2014-15 4481415/- 2013-14 3926341/- Section 23 refers about the persons not liable for registration (1) The following persons shall not be liable to registration, namely:- (a) Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from the tax under this Act or under the Integrated Goods and Services Tax Act; (b) An agriculturist, to the extent of supply of produce out of cultivation of land (2) The Government may, on the recommendations of the Council, by notification, specify the category of persons Who may be exempted from obtaining registration under this Act. As the above charitable trust is not falling in any of the above category. He is liable to Registration under the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act 2017. Further the provisions under section 24 are applicable to compulsory registration in certain cases 4. Compulsory registration in certain cases - Notwithstanding an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of goods or supply of services as referred to in Schedule II 04. HEARING The Preliminary hearing in the matter was held on 11.04.2018, Sh. Rahul Thakkar, Advocate along with Sh. Nilesh Parekh Office bearer and Sh. Hemal Ashra, C.A. (Auditor of Trust) and Sh. C. B. Thakkar Advocate appeared and requested for admission of application as per contentions made in their ARA. They were specifically requested to give the costing of the items which are being sold by them as detailed in their catalogues. Jurisdictional Officer Sh. Vikrant Gaikwad, Asstt. Commr. Of S.T. (D-836), Nodal -3, Mumbai appeared and stated they would be making written submission shortly. The final hearing was held on 13.06.2018, Sh. C.B. Thakkar, Advocate, Sh. Nilesh Parekh Office bearer and Sh. Hemal Ashra, C.A. (Auditor of Trust) appeared and made oral contentions that they had not submitted the costing of items as requested during Preliminary hearing. They stated that they would be giving costing of 5 to 7 items having higher 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 gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) services provided by a race club by way of totalisator or a Licence to book maker in such club; and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities; We find that there is no doubt that applicant Trust is a person as defined u/s 2(84) of the GST Act. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal officer in his submissions has stated that the applicant is engaged in sale of goods or providing of services which are as under:- "The dealer is engaged in supply of goods under GST. The dealer is holding a stock of goods as 31/03/ 2017 at Rs. 15882218/-. The year wise details of income /consideration received from sale of goods (Spiritual Products) in previous years is as under - 2016-17 - Rs. 4359967/- 2015-16 - Rs. 4972259/- 2014-15- Rs. 4481415/- 2013-14 - Rs- 3926341/- Further the dealer have provided accommodation and food in various Shibirs/Satsang for consideration. The details of Shibir and stay income areas under - 2016-17 - Rs- 51910491/- 2015-16 - Rs- 78042209/- 2014-15 - Rs. 32815747/- Further with respect to the activities of the applicant, we find the below given details from their trust deed paras extracted from the copy 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds the mode of obtaining salvation taught by 'Tirthankar' Bhagvan Shree Mahavir Swami and Vitrag Prabhu and famous as Jain Religion in the world and by becoming non-attached to worldly things or happiness. Other Objectives of the Trust:- (1) Social Services, Public Aids and Religious Activities To carry out, get carried out and support activities which uplifts people's social, worldly, economic conditions and religious activities such as 'Swamivatsalya' , 'Sadharmik", Devotion, Pilgrimage, Sadhak Samadhi' Funds etc. and to make disposition of the same and to carry out, get carried out and support activities related to the same which may be necessary to attain the above mentioned fundamental objective. (2) Activities of spreading the knowledge To print, publish or get printed, published the constructive scriptures 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 reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents after giving consideration in respect thereof and they shall have absolute right to collect the sale proceeds and to issue receipt in respect thereof." Now in view of the detailed submissions of the applicant, submissions of the jurisdictional officer, relevant paras of Trust Deed and detailed related discussions above, we examine the scope of supply as per Section 7 of the CGST Act which is as under:- Section 7 of CGST Act, 2017: - (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 or furtherance of (b) import of services for a consideration 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducational programs or skill development relating to: * Abandoned, orphaned or homeless children; * Physically or mentally abused and traumatized persons; * Prisoners; or * Persons over the age of 65 years residing in a rural area; Preservation of environment including watershed, forests and wildlife. We find that 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, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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