2020 (7) TMI 113 - AAR - GST

Levy of GST - charitable trust - appellant providing legal, medical, psychological and financial support to the women and their children surviving violence and abuse - supply of services or not - reverse charge mechanism - HELD THAT - The applicant makes payments not to the supplier of the services, but as financial support in the form of reimbursement to the recipient survivor. It is, therefore, not liable to pay GST based on reverse charge mechanism on such payments - The applicant does not charge any consideration for facilitating the legal aid and other assistance. Such activities of the applicant, therefore, does not result in supply of service as defined under section 7 (1) of the GST Act. The applicant is not, therefore, liable to pay tax thereon.

Summary

Issues: Admissibility of the Application, Submissions of the Applicant, Observations and Findings of the Bench.

Admissibility of the Application:
The applicant, a charitable trust, seeks clarification on its tax liability for providing legal, medical, psychological, and financial support to women survivors of violence. The application is deemed admissible under section 97(2) (e) & (g) of the GST Act as the question raised is not decided or pending before any authority. Administrative jurisdiction is waived due to the applicant being unregistered.

Submissions of the Applicant:
The applicant offers various support services to women survivors without charging them, funded by donations and interest income. Financial aid includes reimbursing court fees, lawyers' fees, medical expenses, and remunerations for trainers and facilitators of workshops.

Observations and Findings of the Bench:
The Bench notes that the applicant's activities primarily benefit the survivor women, not the applicant itself. Payments made are financial support to the recipients, not consideration for services rendered. As the applicant does not engage in chargeable services and does not receive consideration for its assistance, it is not liable to pay GST under the reverse charge mechanism. The activities do not qualify as a 'supply' of services under section 7(1) of the GST Act, absolving the applicant from tax liability.

Ruling:
The ruling states that the applicant's activities, involving support to women survivors of violence, do not constitute a 'supply' of service. Consequently, the applicant is not obligated to pay GST on the described activities. The ruling remains valid unless declared void under Section 104(1) of the GST Act.