The applicability of GST on services related to charitable and religious activities under the GST Act, 2017 is a complex issue with various exemptions and nuances. Here’s a breakdown to help you understand:
Services Exempted from GST:
- Advancement of religion, spirituality or yoga:Services directly related to religious or spiritual activities, such as conducting pujas, organizing religious discourses, or providing yoga classes, are exempt from GST Act, 2017.
- Public health:Services related to providing healthcare, including running hospitals, dispensaries, and ambulance services, are exempt from GST.
- Educational programs or skill development:Services provided by educational institutions registered under specific sections of the Income Tax Act, including pre-school and higher secondary education, are exempt from GST Act, 2017.
- Preservation of environment:Activities like protecting forests, wildlife, and watersheds are exempt from GST Act, 2017.
- Recreational training or coaching:Coaching related to arts, culture, or sports, offered by registered entities, is exempt from GST Act, 2017.
- Running an old age home:Services provided by registered old age homes are exempt from GST Act, 2017.
- Public libraries:Lending books and other materials from public libraries is exempt from GST Act, 2017.
- Religious pilgrimages:Pilgrimages organized by certain government-notified entities, like the Haj Committee, are exempt from GST Act, 2017.
Services Liable to GST Act, 2017:
- Commercial activities:Any commercial activities undertaken by charitable or religious institutions, such as selling goods, renting out premises beyond permitted limits, or providing services outside the scope of exemptions, are liable to GST Act, 2017.
- OIDAR services:Online Information and Database Access or Retrieval (OIDAR) services received by charitable trusts, such as advertising on the internet, e-books, or online gaming, are subject to reverse charge (i.e., the trust is responsible for paying GST).
- Services received from unregistered entities:Services received by charitable trusts from unregistered entities are generally taxable under the reverse charge mechanism.
EXAMPLE
Religious Services:
- Temple administration and maintenance:Many organizations and government departments like the Hindu Religious and Charitable Endowments Department (HRCE) manage temples, conduct pujas, offer darshan, and maintain temple facilities. You could contribute services like volunteering for temple cleanliness, assisting with rituals, or teaching religious education GST Act 2017.
- Pilgrimage assistance:Pilgrimage centers in places like Madurai, Kanchipuram, and Rameswaram require support for crowd management, food distribution, accommodation arrangements, and guiding pilgrims. You could offer language translation, medical aid, or information services.
- Religious education and cultural promotion:Organizations like Isha Foundation and Narayana Guru institutions promote Hindu philosophy, yoga, and meditation GST Act 2017. You could volunteer to teach yoga, Sanskrit, or conduct lectures on religious texts.
- Charitable services:Religious institutions often run orphanages, shelters for the homeless, and free medical clinics. You could volunteer for tasks like feeding the needy, providing basic care, or fundraising for these initiatives.
Non-Religious Charitable Services:
- NGOs and social welfare organizations:Many NGOs like Seva Sankalpam, Sri Ramakrishna Mission, and Karuna Trust work on various social issues like education, healthcare, women’s empowerment, and environmental protection. You could volunteer for education programs, medical camps, rural development projects, or fundraising activities GST Act 2017.
- Food and shelter:Organizations like Akshaya Patra Foundation and Annamrita provide free meals to underprivileged children and communities. You could volunteer for cooking, food distribution, or managing kitchen operations.
- Skill development and livelihood training:NGOs like Don Bosco Tech Society and Rural Development Trust offer vocational training programs for the underprivileged. You could teach skills like tailoring, computer literacy, or agricultural techniques.
- Animal welfare:Humane organizations like Blue Cross of India and Animal Welfare Board of India need volunteers for animal rescue, shelter management, fundraising, and awareness campaigns GST Act 2017.
- Environmental initiatives:Organizations like Green Hope Trust and Wildlife Conservation Society of India work on tree planting, sustainable practices, and waste management. You could participate in clean-up drives, awareness campaigns, or ecological restoration projects GST Act 2017.
FAQ QUESTION
Q: Which services provided by charitable/religious trusts are exempt from GST Act 2017?
- Advancement of religion, spirituality or yoga:Services related to religious activities, including conducting pujas, prayers, discourses, etc., are exempt from GST Act 2017.
- Public health:Services provided by hospitals, dispensaries, and other healthcare institutions run by charitable trusts are exempt from GST Act 2017.
- Educational programmes or skill development:Educational services provided by institutions registered under Section 12AA of the Income Tax Act are exempt from GST. This includes pre-school, school education, and higher secondary education.
- Preservation of environment:Activities related to protecting the environment, forests, wildlife, and watersheds undertaken by charitable trusts are exempt from GST.
- Recreational training in arts, culture, or sports:Providing coaching or training in arts, culture, or sports, without any profit motive, is exempt from GST Act 2017.
- Running an old age home:Services provided by old age homes registered under Section 12AA of the Income Tax Act are exempt from GST Act 2017.
- Public libraries:Lending books and other knowledge-enhancing material from public libraries is exempt from GST Act 2017.
Q: What about services provided to charitable/religious trusts?
- Services provided to charitable/religious trusts are generally not exempt from GST Act 2017 unless specifically mentioned in the notifications. This includes services like catering, security, cleaning, etc.
- However, services received by trusts registered under Section 12AA from outside India for charitable purposes are exempt from GST Act 2017 under reverse charge mechanism.
Q: Are goods supplied by charitable/religious trusts exempt from GST Act 2017?
- No, the supply of goods by charitable/religious trusts is not exempt from GST Act 2017.Any sale of goods, including food, souvenirs, etc., is liable to GST at the applicable rate.
Q: Can religious pilgrimages organized by trusts be exempt from GST?
- Only specific organizations notified by the government, like the Haj Committee, are currently exempt from charging GST Act 2017 on organizing religious pilgrimages.
Q: What about renting out premises of a religious place?
- Renting out precincts of a religious place owned by a trust registered under specified sections of the Income Tax Act is exempt from GST Act 2017 if the rent charged doesn’t exceed the prescribed limits.
CASE LAWS
Determining the applicability of GST to services related to charitable and religious activities under the GST Act 2017 involves a nuanced examination of the specific service rendered, the nature of the organization providing it, and any applicable exemptions or notifications. Here’s a breakdown of key case laws and relevant provisions:
Exemptions for Charitable and Religious Activities:
- Registration under Section 12AA of Income Tax Act:Services provided by institutions registered under Section 12AA for the advancement of religion, spirituality, or yoga are generally exempt from GST Act 2017. (Notification No. 12/2017-Central Tax Rate dated 28th June, 2017)
- Public Libraries:Activities of public libraries, including those run by charitable or religious trusts, by way of lending books or other publications are exempt. (Notification No. 12/2017-Central Tax Rate dated 28th June, 2017)
- Rent out of religious premises:Rent-out of religious premises owned or managed by a registered charitable trust for general public is exempt, subject to rent limitations (e.g., Rs. 1,000 per day for rooms, Rs. 10,000 per day for open areas, Rs. 10,000 per month for shops). (Notification No. 12/2017-Central Tax Rate dated 28th June, 2017)
- Specific organizations for pilgrimages:Certain organizations notified by the government, like Haj Committee and Kumaon Mandal Vikas Nigam Limited, are exempt from GST Act 2017 for organizing religious pilgrimages.
Case Laws Interpreting Exemptions:
- AAAR upholds applicability of GST to charitable/religious trusts: This Appellate Authority for Advance Ruling case stated that activities beyond advancement of religion, spirituality, or yoga within a charitable trust might be taxable. (AAAR order no. MAH/AAAR/SS-RJ/14/2018-19 dated 24th December, 2018)
- Appellate Authority for Advance Ruling (Gujarat) Case: This case clarified that renting out a marriage hall in a temple complex by a trust solely for religious functions is exempt, even if exceeding rent limits. GST Act 2017 (Gujarat AAA Ruling No. GUJ/AAAR/AR/04/2019-20)
Important Caveats:
- Commercial activities undertaken by a charitable or religious trust, even within their premises, are generally taxable. (e.g., running a business within the temple complex)
- Services like catering, security, housekeeping provided by third parties within exempt premises might be taxable.
- Any fees charged for participation in religious programs not solely focused on advancement of religion, spirituality, or yoga might be taxable GST Act 2017.