The Gujarat Authority for Advance Ruling (AAR) has ruled that the activity of Afforestation carried out by the applicant as a charitable organization is exempted from GST are not required to be get registered under GST.
M/s. Vikas Centre For Development is a charitable trust registered under Section 12AA of the Income Tax Act, 1961 carrying out charitable activities. The objects of the Trust are to undertake, promote and support such activities leading to the promotion of human development and welfare among the general public and to render all types of services for the amelioration, relief, betterment and advancement of the community and for carrying out any programme for the benefit of the fellow beings and any other object of public utility.
It was submitted that the activities are the preservation of the environment and the same is covered under the definition of charitable activities as defined in clause 2(r) of Notification No.12/2017-CT (Rate). The applicant is of the view that it being registered under Section 12AA of the Income-tax Act, 1961, becomes exempt from tax under the GST Acts, by Entry No. 1 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017.
Further submitted that since the applicant is not engaged in “business”, the transactions of the applicant are not “supply” transactions as defined under the GST Acts and the Appellant is not carrying out any business, there can be no supplies liable to GST at the hands of the Appellant.
A two-member bench of Amit Kumar Mishra and Milind Kavatkar observed that all the funds received in the year 2022-23 would be utilized for the project of plantation only and the applicant activity do not cover under the Supply as defined under Section 7 of CGST Act 2017. 17.
The Gujarat AAR held that the applicant’s service of plantation of mangroves is covered under point (iv) of Charitable Activity define under clause 2 (r) of Notification No. 12/2017-CT (R) dated 28-6-2017 as amended and is eligible for exemption from payment GST in terms of entry No. 1 of Not. No. 12/2017-CT (Rate) dated 28-6-2017. 18.
Further held that the applicant’s service does not cover supply as defined under Section 7 of the CGST Act, 2017, therefore, an applicant is not liable for registration under the provisions of Section 22(1) of the CGST Act, 2017.
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