Membership Fee collected by Rotary Club subject to GST, Registration Required: AAR [Read Order]

The Tamil Nadu bench of the Authority for Advance Rulings (AAR) has held that the membership fee collected by the Rotary club would be subject to GST.

The applicant, "Rotary" is an international organization having clubs in 216 countries engaged in humanitarian and charitable services. These services are executed through various districts comprising of many clubs. The amount collected by rotary is pooled together only for sole purpose of charity and humanitarian activities and these amounts are also used for administration and meetings. In some cases the amount so collected is likely to exceed Rs.20 lacs, being the threshold for registration under GST Act,2017. The applicant approach the AAR bench seeking clarification on their tax liability.

The bench comprising K Latha (Member SGST) and T G Venkatesh (Member, CGST) observed that the membership fees collected by the applicant from their Members is subject to tax as per Section (1) (aa) of the GST Act as the activities rendered by the applicant to their Members is a supply to its constituents/members and they have to be registered.

“With respect to the question of whether specific activities listed by them and performed by the applicant are liable to tax, it has been found that the activities so rendered by the applicant are pertaining to the previous years and they have been rendered complete. Hence the question is found to be beyond the scope of Section 95(a) of the Act and is not answered,” the bench said.

To Read the full text of the Circular CLICK HERE

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