Central Board of Excise and Customs has explained various provisions on applicability of GST on Charitable and Religious trusts registered under section 12AA of Income Tax Act, 1961 (“trusts”) as mentioned in Notification No. 12/2017-Central tax dated June 28, 2017.
Charitable Activities have been defined under the above notification as:
“charitable activities” means activities relating to:
- public health by way of ,-
- care or counselling of
- terminally ill persons or persons with severe physical or mental disability;
- persons afflicted with HIV or AIDS;
- persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or
- public awareness of preventive health, family planning or prevention of HIV infection;
- care or counselling of
- advancement of religion , spirituality or yoga; 22
- advancement of educational programmes 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;
So all the services provided by trusts are not exempt. Only those activities/ services provided by the trust as mentioned in the definition above are exempt from GST. For example renting of premises, grant of sponsorship and advertising rights during conduct of an event etc are not covered by definition of “charitable activities” and hence GST shall be applicable.
However, immovable properties owned by charitable trusts like marriage hall, convention hall, rest house for pilgrims, shops situated within the premises of a religious place are rented out, income from letting out of such property is wholly exempt from GST (as exemption is provided vide entry no. 13 of Notification No. 12/2017). But if such properties are not situated in the precincts of a religious place meaning thereby not within walls or boundary walls of the religious place, income from such letting out will lose this exemption and income from it will be liable to GST.
Also, Income from a religious ceremony organised by a charitable trust is exempt as per the entry no. 13 of Notification No. 12/2017. If Income loses its religious nature, it shall be chargeable to GST.
However, a school run by trust for purposes other than charitable activities will not be exempted from GST. However entry no. 66 of Notification No. 12/2017 provides exemption on supply of specific services to eligible educational institutions.
Similarly, if trusts are arranging residential or non-residential yoga camps by receiving donation or other charges from the participants, these will not be considered charitable activities (as it is different from advancement of religion, spirituality or yoga).
Though, any supply of goods by trusts is taxable under GST.
Read more at: http://www.cbec.gov.in/resources//htdocs-cbec/gst/gst-charitable-religious-trusts.pdf