No GST on Membership Fee for Convenience of Lions Club Members, says It is not for Furtherance of Business: AAR [Read Order]

Lions Club - GST - Taxscan

The Maharashtra Authority of Advance Ruling has held that there is no GST liability for the amount collected by individual Lions club and Lions District is for the convenience of Lion members and pooled together only for paying Meeting expenses & communication expenses and the same is deposited in single hank account.

The AAR also observed that there is no furtherance of business in this activity and neither any services are rendered goods being traded.

The Applicant Lions Clubs are autonomous units those collect fees from their members in order to meet their administrative costs. Similarly, Lions Districts collect fees from Clubs and Cabinet Members to manage District activities.

Lions Club and Lions District are proposing to levy GST as per CGST / MGST ACT 2017, on the member’s fees if they cross the threshold limit as applicable. It is felt that under the princ mutuality and since the fees so collected are only pooled together for convenience and for defraying meeting-expenses and Administrative expenses should not be brought under the purview of GST.

While deciding the issue against department, the AAR observed that, “As can be seen, the club is not formed to provide any supply of goods or services to its members qua the fees received from them. There being no supply qua the fees received, there arises no occasion for us to visit the definition of ‘Supply’ under the GST Act. The applicant club as per the facts put up before us does not render any ‘Supply’ for the purposes of the GST Act”.

“We would want to deal with one aspect discussed by the official about seminars for Leadership Development as organized for the members. Such activities does not appear to be for transforming members into leaders generally but for the members to become leaders to perform towards the causes of the club. Thus, here too, the amounts spent are for building and empowering a human resource to help perform the activities of the Club in a better way. The members pay fees to act as volunteers in the social causes. Besides, the club is not formed to build and empower or impart skills in leadership such that people would get themselves enrolled for acquiring the skills. By no means could it be said that the members pay fees to acquire services of training in leadership development”, the Authority also said.

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