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TMI Blog2021 (12) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... rative expenses incurred including the expenses for the location and light refreshments, amounts to or results in a supply, within the meaning of supply ? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MOST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any 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, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions made by the applicant are as under 2.1 The applicant, Rotary Club of Mumbai Elegant is a group of people who carry out various charitable causes and activities from donations received from members, amount collected through various other channels and accruals of the corpus fund. Donations/charity received are used exclusively for the purpose of donation/charity and no amount is utilized for administration purposes. In addition to that, sums are recovered from all the members for expending the same for the weekly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice tax matter, observed that the definition of "services" under section 65B(44) of the Finance Act, 1994 requires that the provision of services by one person to another, and the doctrine of mutuality, which is applicable to clubs qua sales tax for supplies to members, was equally applicable "on all fours to services" Consequently, services by a members' club to its members amounts to services to self. 2.9 To tax the transaction between an association or club and its members, said transaction must either fit either under clause (a) or clause (c) of Section 7 of the CGST Act, 2017, which defines the term "supply". As per Clause (a) there must be supply of goods or services or both for a consideration and such supply must be in the course or furtherance of business. BUSINESS:- 2.10 The term "business" is defined u/s 2(17) and reproduced below for ready reference; (17) "Business" includes (e) Provision by a club association society or any such body (for a subscription or any other consideration) of all the facilities or benefits to its members". In applicant's case, members of the club come together only for social cause and there is neither furtherance of any business of benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Authority for Advance Ruling for GST, in the cases of Rotary Club of Mumbai Queens Necklace (Order 06.11.2019) and Rotary Club of Mumbai Nariman Point (Order No. MAH/AAR/SS-RJ/20/2019-20, dt. 11.12.2019). 2.15 No effect of new clause (aa) in sub-section (1) of Section 7 of the CGST Act A new clause (aa) was inserted in Section 7(1) of the CGST Act, with retrospective effect from 1st July, 2017, to provide levy of tax on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. 2.16 Applicant submits that insertion of said clause doesn't alter case of Rotary Club, because of Agency principle' and reasoning of AAAR in the cases of in the cases of Rotary Club of Mumbai Queens Necklace and Rotary Club of Mumbai Nariman Point. 3. CONTENTION - AS PER THE CONCERNED OFFICER: The submissions made by the officer are as under:- 3.1 As to applicant, it is noticed that collection is made separately for administrative expenses as Subscription dues. Further social services are funded separately by raising separate fund for the proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral submissions with respect to admission of their application. 4.2 The application was admitted and called for final e-hearing on 29.10.2021. The Authorized representative of the applicant, Shri. Sheetal Prakash Khandelwal, CA was present. The Jurisdictional officer Smt. Neeta Kadam, STO, MUM-VAT-C-137, Nodal-9 was also present. The Applicant made oral and written submissions. The jurisdictional officer requested for time file written submissions and was allowed three working days. 4.3 The matter was heard. 05. DISCUSSIONS AND FINDINGS: 5.1 We perused the documents on record, facts of the matter and submissions made by the applicant as well as the jurisdictional officer. 5.2 The applicant also collects fees from its members which is used for its own administration purpose as well as for facilitation of meetings of its members. 5.3 The fees collected from members is pooled together to be spent for meeting/administration expenses & for making payments to the DOR/International Office, for administrative expenses. The applicant has submitted that, it is a group of persons working which carries out various charitable activities for which it receives amounts as donations/charity a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and their members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another;". 5.6.3 The amendment mentioned above has received the assent of the President of India on the 28th March, 2021 and in view of the same the issue of principles of mutuality in the case of cooperative societies like the applicant has raised, been settled. 5.6.4 As per section 2(84) the term "person" includes (a) an individual .......................... (f) an association of persons or a body of individuals, whether incorporated or not, in India or outside India. 5.6.5 Therefore, in view of the amended Section 7 of the CGST Act, 2017, we find that the applicant society and its members are distinct persons and the contribution received by the applicant, from its members is nothing but consideration received for supply of goods/services as a separate entity. The principles of mutuality, which has been cited by the applicant to support its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a supply, in the subject case. 5.9.1 Further, the term "business" is defined uls 2(17). Clause (e) of said definition is relevant and hence reproduced below for ready reference; (17) "business" includes (e) provision by a club association society or any such body (for a subscription or any other consideration) of all the facilities or benefits to its members" 5.9.2 From a plain reading of the above definition, it is clear that the activities of the applicant falls under the ambit of "business" as per the section 2(17) of the GST Act. 5.10 From the above facts, the definitions and the legal provisions, it is clear that the member and the club are two distinct persons and hence, any activities and transactions between them will be supply between separate/distinct persons. After the retrospective amendment as mentioned above, there remains no doubt that the activities involved in present case are nothing but 'supply', as defined under the Act. Thus, in view of the above the amount collected as membership subscription and admission fees from members is liable to GST as supply of services. The reliance placed by the applicant on order of Hon AAAR in the cases of in the cases of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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