Amount collected as Membership Subscription, Admission Fees from Members by Rotary Club to meet Expenses to be considered as Supply of Services under GST: AAR [Read Order]

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The Maharashtra Authority of Advance Ruling (AAR) ruled that the Amount collected as membership subscription, admission fees from members by Rotary Club to meet expenses to be considered as supply of services under GST.

The applicant, Rotary Club of Nagpur Version is affiliated with Rotary International which is an International organization whose stated purpose is to bring together business and professional leaders in order to provide RULING humanitarian service and to advance goodwill and peace around the world.

The Applicant Club receives fees from its members: purely to defray its expenditure on meetings and communication, Rotary International (RI) per capita dues, subscription fees to the Rotarian or Rotary regional magazine, district per capita dues, club annual dues, etc. Rotary Club holds Pams, Seminars, and Institutes for Leadership Development and other forums, and SHTRA STATE these programs are only for Rotary Club members, and non-members are not allowed to take part. Thus, funds received from members are utilized for mutual benefit of members. The administration and working of the Club and implementation of policies are established and are implemented on the concept of mutuality.

The applicant has sought the advanced ruling on the issue the amount collected as membership subscription and admission fees from members by the applicant club to meet out the expenses for the object for which it is incorporated viz; meeting expenses, communication expenses, Audit fees, Rotary International (RI) per capita dues, subscription fees to the Rotarian or Rotary regional magazine and the like. As there is no furtherance of business in this activity and neither any services are rendered, whether the above transaction can be considered as supply of services to its Members under GST.

The coram of members Ranjiv Magoo and T.R.Ramnani noted that the applicant club and its members are distinct persons and the amounts/consideration received by the applicant from its members are nothing but consideration received for supply of goods/services as a separate entity. The principles of mutuality, which has been cited by the applicant to support its contention that GST is not leviable in its case, is not applicable in view of the amended Section 7 of the CGST Act, 2017 and therefore, the applicant has to pay GST on the said amounts received against membership subscription and admission fees from members.

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