TMI Blog2020 (4) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... entire income of the applicant is exempt from Income Tax, even the donations made to the applicant are admissible deductions for the donors under Section 80G of the Income Tax Act - Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 (Sr.No.1) clearly provides exemption to Services by an entity registered under section 12AA of the Income-tax Act, 1961(43 of 1961) by way of charitable activities. Thus, the activities of the applicant relating to disaster prevention, disaster mitigation and disaster management are activities relating to preservation of environment . Thus, the activities of the applicant are considered as charitable activities and hence, activities of the applicant, being registered under Section 12AA of the Income Tax Act, 1961, exempt from tax under the GST Acts, by virtue of Entry No. 1 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 - Consequently, the applicant is not liable to registration in respect of charitable activities relating to preservation of environment which attracts nil rate of GST, by virtue of Section 23(1) (a) of the Central Goods and Services Tax Act, 2017. - GUJ/GAAR/R/20/2019 (IN APPLICATION NO. Advance Ruling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is sponsored by the Foundation for Public Interest since 1988. Initiated on March 14, 1993, through the resolution of the Board of Trustees of Foundation for Public Interest, AIDMI is one of the community based research, policy analysis, planning and technical assistance organization. Together with local groups, government agencies, and others, AIDMI enhances prevention, mitigation, and management of disasters and reorients relief and reconstruction to local initiatives. Turning disaster into an opportunity for accelerating development is possible. This has been the major contribution of Gujarat to national calamities and that is what AIDMI enhances and institutionalizes in its own way. Primary Objectives of the applicant are prevention, mitigation and management of disaster: 3. A detailed description of objectives, functions and activities of the applicant is also contained in the Memorandum of Association of the applicant. The objectives of the applicant as described in the memorandum of association are as under: (a) Disaster prevention (b) Disaster mitigation (c) Disaster management (d) Relief Administration and Implementation (e) Recov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt contracts entered into by the applicant which indicates the nature of activities undertaken by the applicant are as under: (a) Contracts with Indian Government agencies such as National Human Rights Commission. For example conducting training programs on human rights and disaster risk management in 6 States of India. (b) Contracts with foreign agencies such as United Nations Children s Fund For example for institutionalizing child centered disaster risk reduction. (c) Contracts directly with the State Governments for various activities relating to disaster management. For example contract with the Assam State Disaster Management Authority for training relating to disaster management. Similar contract with Odisha State Disaster Management Authority. (d) Contracts with certain private NGOs for undertaking research relating to disaster management. For example contract with Leadership for Environment and Development India for research study on risk insurance in Odisha. (e) Contracts with educational institutions for conducting research. For example contract with Harvard University South Asia Institute for conducting research. Funds for the activities of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. The applicant respectfully submits that a person who is a supplier is liable for registration as per Section 22(1) of the GST Acts if his aggregate turnover in a financial year exceeds ₹ 20 lakhs. The phrase aggregate turnover' has been defined under Section 2(6) of the GST Acts as under: 2(6) aggregate turnover means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-Stale supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State lax, Union territory lax, integrated tax and cess . 12. Thus the primary requirement for inclusion in aggregate turnover is that the transaction should qualify as supply transaction. The term supply has been defined under Section 7(1) of the GST Acts. Relevant extract of the definition reads as under: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Commissioner of Sales Tax v/s Sai Publication Fund 126 S.T.C. 288 (S.C.) = 2002 (3) TMI 45 - SUPREME COURT . In this case the object of the trust was to spread message of Saibaba of Shirdi and books, literature etc. containing message of Saibaba were distributed. The question before the Supreme Court was whether the trust was a dealer liable to pay tax under the Bombay Sales Tax Act, 1959 on sales of books, pamphlets, booklets, photos etc. While considering somewhat similar provisions as those contained in the Vat Act, Hon. Supreme Court has held in the negative by making following pertinent observations on pages 294-295: From the facts of the present case, the sole object of the assessee - Trust is to spread the message of Saibaba of Shirdi. It is also not disputed that the books and literature, etc., containing the message of Saibaba were distributed by the Trust to the devotees of Saibaba at the cost price. There is no dispute that the primary and dominant activity of the Trust is to spread the message of Saibaba. This main activity of the Trust does not amount to business The activity of publishing and selling literature, books and other literature is obv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the below mentioned judgments of various Hon. High Court which also support the submission that the applicant is not liable for registration under the GST Acts: (i) State Of Tamilnadu v/s Cement Research Institute of India 86 S. T. C. 124 (Mad.) = 1991 (7) TMI 314 - MADRAS HIGH COURT : A research institute having the object of doing research and scientific work, if sales goods manufactured in the course of research, cannot be considered as having engaged in any commercial activity. It is therefore concluded that it is not doing any business and hence it is not liable to tax on sale proceeds of such goods. (ii) State Of Andhra Pradesh v/s A. P. Housing Board 70 S. T. C. 203 (A.P.) = 1988 (2) TMI 440 - ANDHRA PRADESH HIGH COURT : A housing board established by the state government for framing and executing housing schemes cannot be considered as a dealer engaged in business of buying and selling goods and therefore it is not liable to pay tax on sales of old unused forms and unserviceable materials. (iii) Arulmigu Dhandayuthapani Swami Thirukkoil v/s Commercial Tax Officer - II, Palani 108 S.T.C. 114 (Mad.) = 1997 (9) TMI 583 - MADRAS HIGH COURT : Temple carryi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kashi Vidyapeeth v/s State of Uttar Pradesh 64 VST 271 (All.) = 2013 (4) TMI 497 - ALLAHABAD HIGH COURT : A university which is imparting education was held to be not a dealer under the Uttar Pradesh Value Added Tax Act, 2008 as it did not have motive to do business. It was observed that motive on the part of the university to indulge in any business activity was totally lacking and statutorily impossible. It was a matter of convenience for students and university to get admission forms printed for a price. Such activity did not constitute business and therefore the university was not a dealer liable to pay tax. ALTERNATELY SERVICES BY WAY OF CHARITABLE ACTIVITIES/SERVICES TO GOVERNMENT EXEMPT FROM TAX AND HENCE NO REGISTRATION IS REQUIRED: 19. Without prejudice to the above and in the alternative it is respectfully submitted that even if the activities of the applicant qualify as supply transactions, they are services by way of charitable activities which are fully exempt from tax under the GST Acts and therefore also no registration is required by virtue of Section 23 of the GST Acts. Entry No. 1 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the afore stated definitions point out that environment is a wide term encompassing the surroundings and living conditions of the people and also includes social conditions. Disaster has grievous consequences on the environment in which people live and therefore activities of disaster prevention, mitigation and management will come within the ambit of preservation of environment . Hence it is respectfully submitted that the activities of the applicant are in any case charitable activities and the applicant being registered under Section 12AA of the Income Tax Act, 1961 such activities are in any case exempt from tax under the GST Acts. 24. In fact the contracts entered into by the applicant directly with various governments also qualify for exemption under Entry 3 of the aforementioned exemption notification which reads as under: SI.No. Chapter, Section, Heading, Group or Description of Services Rate (per cent) Condition (1) (2) (3) (4) (5) 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g. Jurisdictional Authority has not furnished any comments in the matter. 30. We find that the applicant has raised the following question for the purpose of advance ruling under section 97 of the Central Goods and Services Tax Act, 2017/the Gujarat Goods and Services Tax Act, 2017 (herein after collectively referred to as the GST Acts ): Whether the applicant is liable for registration under the GST Acts? 31. We find from the objectives of the applicant as described in the Memorandum of Association as well as from the bye-laws of the applicant, which laid down the modes by which the applicant can raise funds for its activities as mentioned in foregoing paras that the applicant is a charitable trust registered under the Bombay Public Trust Act, 1950. It was established for community based research, policy analysis, planning and technical assistance for the purpose of enhancing prevention, mitigation and management of disasters and reorientation of relief and reconstruction to local initiatives. Thus the applicant is engaged in training/research relating to disaster prevention, mitigation and management. 32. We further observe that the Applicant is duly registered as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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