TMI Blog2022 (2) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... or another and hence is a supply liable to be taxed - the activities rendered by the applicant to its members for which the membership fees collected forms the consideration is a supply and is liable to be taxed. Once it is held that the applicant and it's members are distinct and that the membership fee collected from its members is found taxable, they provide taxable service and are required to be registered under the CGST Act, 2017 subject to the exceptions available with regard to the monetary limit for such registration. Whether the activities rendered by the applicant, which they term as charitable etc., amount to supply? - manner of determination of tax liability - HELD THAT:- In the present case, the applicant had furnished details for the activities already done in the yester years. During the Personal hearing held on 21.12.21, the applicant was informed that the activities pertained to the years 2017-18 and 2018-19, which have been completed on which ruling cannot be extended by this authority under Section 95 of the GST Act. The authorized representatives accepted the fact. Hence this authority is constrained in considering this question on merits. Therefore no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether registration is required? 2) If yes then, whether any particular thing done by the applicant with respect to any goods and/or services or both amounts to or results in a supply of good and/or services or both within the meaning of that term and 3) What would be the manner to determine the liability to pay tax on any goods or services or both ? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of ₹ 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that Rotary is an international organization having clubs in 216 countries engaged in humanitarian and charitable services. These services are executed through various districts comprising of many clubs. The amount collected by rotary is pooled together only for sole purpose of charity and humanitarian activities and these amounts are also used for administration and meetings. In some cases the amount so collected is likely to exceed ₹ 20 lacs, being the threshold for registration under GST Act,2017. 2.2 On interpretation of law, the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have built hospitals in Vellore and have done charitable activities with the contributions/donations collected. They further stated that they don't offer any recreational facilities to their members and the members meet for the sole purpose of raising funds. They were asked to furnish a detailed write up on their structure, roles, activities, balance sheet and trail of accounts relating to membership fees and donations received head wise and on specific activities for which ruling is required. 3.2. Applicant did not submit the relevant documents as called for during the Personal hearing held on 22.09.21. Hence they were addressed vide letter dt. 01.11.21 for which they replied stating that they may be granted time till 26th November,21. As no reply was received from them, they were again addressed vide letter dt.02.12.21 requesting them to submit the documents called for within 7 days of receipt of that letter. When no response was received from them, a Personal hearing was fixed on 21.12.21, and they were intimated that in case of failure to attend the same, the application will be decided based on the material available with this authority. The Authorised representative Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) ... (b) (e) provision by club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; It is a known fact that Rotary Clubs, apart from charity, are organizing various entertaining events for their members like New Year / Diwali/Pongal celebrations, etc., and also seminars/conferences, which amounts to provision of the facilities or benefits to its members, thus a business activity. Hence, if the membership fees collected by them crosses the applicable threshold limit, they need to get registered and pay applicable GST. if the aggregate value of goods/services supplies is more than 40 lacs then the Club is liable for GST registrations. However, if any of the activities of the club comes under the purview of Section 24, the same is liable for GST registration irrespective of the turnover. In respect of Q.No.2 3 the applicant may refer to the definition of business under GST Act referred above for arriving at activities of taxable nature of the supplies, i.e., of good and/or services or both. 5. The State Jurisdictional authority has stated that there are no pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sole purpose of charity activities; (ii). Whether the membership fee collected is subject to tax and (iii) Whether the activities performed by them are taxable and if so what is the manner of determination of tax liability for such activities. These questions fall within the ambit of Section 97 of the GST Act and they are admitted. 7.1. The issue of whether the applicant is to be registered was discussed during the Personal hearing held on 2-2.09.21, wherein the authorised representative, stated that each district of Rotary has a distinct GST number and PAN number. Further, they stated that they collect annual membership fee of ₹ 1000/- per member and an admission fee from new members. They requested for a ruling on whether such fees collected is subject to tax in as much as the definition of persons as provided u/s 2 (84) of the COST Act 2017 stipulates that, there is no deeming fiction to treat association and members as different persons and that the key condition to tax a transaction u/s 7 (1) (a), that supplier and recipient must be different is not satisfied in their case. As the question (i) and (ii) above, relates to whether they need to be registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons available with regard to the monetary limit for such registration. 8.1 Now the question of whether the activities rendered by the applicant, which they term as charitable etc., amount to supply and what is the manner of determination of tax liability is being taken up for discussion. As the applicant had not furnished any documents along with their application, during the Personal hearing held on 22.09.2021, they were asked to submit a detailed write up on the structure of the Rotary district 3231, the roles, activities, Balance sheet and trail of accounts relating to membership fees and donations received head wise and on specific activities for which ruling was required. However the applicant did not submit any details or documents. They were given repeated opportunities to submit substantiating documents and after many reminders, a statement of service projects done during 2018-19 and seminars and events held in the Rotary year 2017-18 were submitted which is 'appended below: Details of Seminars and events held in Rotary Year 2017-18 President Elect Training Seminar PETS Held on 30th April 2017 for Club Presidents and family were Study Materials and Lunc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crores and was initiated during 2018-19 and is likely to be completed during the year 2020. 3) Rotary Club of Gummidipondi Industrial City has initiated during 2018-19 construction of Low Cost houses for 62 blind persons. The project cost is ₹ 1.75 crores and 5 houses were handed over during 2018-19. Balance houses are likely to be completed during 2020. 4) Rotary Club of Vellore Mid Town constructed a Low-Cost House at the cost of ₹ 3.5 lakhs and handed it during 2018-19 to a polio affected person. 5) Rotary Club of Ambur started the construction of 39 Low-Cost Houses to 39 Narikorava family. The project cost is ₹ 1.17 lacs. 5 houses were handed over during 2018-19. 6) District 3231 contributed 4.5 lakhs for construction of a house and relief at Flood affected Districts of Kerala. 7) Many Rotary Clubs did relief work after Gaja Cyclone in Southern Districts. 8) Rtn. PDG SVRM Ramanathan involved RC Eagle Town Tirukalikundram and constructed Nallammai Ramanathan Rotary Eagle Town Tirukalikundram Hospital at cost of ₹ 1.5 crore and made available to the Public during 2018-19. 9) Tree plantation - more than 100000 tree plantations done by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 97 or sub-section (1) of section 100 '[or of section 101C], in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant; As per the above definition, Advance ruling means a decision provided by the relevant authority on questions in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Hence the activities have to be either undertaken in the present or should be proposed to be undertaken to seek a ruling. In the present case, the applicant had furnished details for the activities already done in the yester years. During the Personal hearing held on 21.12.21, the applicant was informed that the activities pertained to the years 2017-18 and 2018-19, which have been completed on which ruling cannot be extended by this authority under Section 95 of the GST Act. The authorized representatives accepted the fact. Hence this authority is constrained in considering this question on merits. Therefore no ruling is extended in respect of this question as the same is not related to the activities being undertaken or proposed to be undertaken. 9.1 To sum up, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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