Joint Plant Committee not required to Register under GST: AAR [Read Order]

Recently the Authority for Advance Rulings ( AAR ), Kolkata, in its order held that Joint Plant Committee is not required to be registered under the GST Act, if the committee is not otherwise liable to pay tax under reverse charge under Section 9(3) of the GST Act, 2017.

The applicant, Joint Plant Committee, is a non-profit organisation constituted by the Central Government under Clause 17 of the Iron & Steel (Control) Order. The functions of the applicant as notified by the Ministry of Steel, Government of India, include management and operation of the Steel Development Fund and other funds accumulated under the Iron & Steel (Control) Order, 1956, study and analysis of and maintenance of a comprehensive database on market situation in the Iron & Steel Sector including fluctuation in market price, production, availability and movement of material  The applicant has not registered under any of the repealed acts and has sought a ruling on whether the applicant is required to be registered under the CGST/WBGST Act, 2017.

The main source of income for the applicant is from the interest it receives from the loans extended from the Steel Development Fund. The secondary source of income includes consideration from the sale of journals and periodicals and also from renting accommodation in its guest house. The total income exceeds the threshold of twenty lakh rupees and makes it liable for registration under Section 22 (1) of the GST Act, provided it does not make exclusively supply of goods or services that are not liable to tax or wholly exempt from tax under the GST Act.

The applicant’s periodicals and journals are already exempted under a Notification dated 28/06/2017 of the WBGST Act,2017. The applicant argued that its supplies of services are not taxable and that the nature and type of charitable institutions and/or organizations registered under section 12AA of the IT Act and the charitable institutions and/or organizations registered under section 10(23C) (iv) of the IT Act are same and identical, and, therefore, all its supplies of services should come under serial no. 1 of the Notification dated 28/06/2017. (Exemption Notification)

However, the authority found out that exemption under serial no. 1 of the Exemption Notifications for Services is available for charitable activities within the meaning of definition clause (r). they pointed out that charitable activities mean activities relating to public health of specific categories, advancement of religion, spirituality or yoga, advancement of educational programmes or skill development relating to specific categories and preservation of environment, including watershed, forests and wildlife. As none of the applicant’s services were eligible under this clause. Serial no. 1 of the Exemption Notifications for Services was therefore held as not applicable. The Authority further found that the applicant was wholly exempt from providing services like renting guest houses extending deposits, loans or advances as per Serial No. 14 & 27 of the Exemption Notifications.

The authority comprising of Members Vishwanath and Partha Sarathi Dey observed “Section 24 is not subject to the provisions of Section 23 of the GST Act. If a person, therefore, is not liable to be registered for making exclusively exempt supplies but is liable to pay tax under Reverse Charges under Section 9(3) of the GST Act or 5(3) of the IGST Act, he shall be required to get himself registered under the GST Act, irrespective of the quantum of the aggregate turnover. Based on information furnished along with the Application and the material presented at the time of Personal Hearing, it is, therefore, held that the Applicant is engaged exclusively in supplying goods and services that are wholly exempt from tax, and, therefore, not liable to be registered in accordance with the provisions under section 23(1) of the GST Act, subject to the condition that the Applicant is not otherwise liable to pay tax under the Reverse Charge mechanism under Section 9(3) of the GST Act or 5(3) of the IGST Act. As the applicant is unregistered and not liable to be registered, the provisions of Reverse Charge under section 9(4) of the GST Act or 5(4) of the IGST Act will not apply.”