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2022 (5) TMI 1354 - AAR - GSTExemption from GST - Entrance / Admission fees which forms part of corpus fund - Annual Subscription fees - Annual Maintenance fees - amount / fees collected towards rendering training / coaching in recreational sports activities - Football / Basketball/ Athletic / Cricket / Swimming coaching fees - Summer coaching fees - Dance coaching - Karate / Physical fitness - entry no. 80 of notification 12/2017-CTR dated 28th June 2017 - Principles of mutuality - HELD THAT - As per clause (aa) of Section 7 (1) of the CGST Act the activities or transactions by a person other than an individual to their members or constituents or vice versa for cash deferred payment or other valuable consideration. The said clause (aa) clearly specifies that all or any activates or transactions by a person (in this case the applicant) to their members will be treated as supply and therefore fees/contributions from the members recovered for expending the same for the administration of the club its maintenance and for provision of services etc. to its members amounts to or results in a supply - in view of the amended Section 7 of the CGST Act 2017 we find that the applicant and its members are distinct persons and the fees received by the applicant from its members are nothing but consideration received for supply of goods/services as a separate entity - Entrance/Admission fees Annual subscription Maintenance fees etc are liable to tax under the GST Laws. Whether the amount / fees collected towards rendering training / coaching in recreational sports activities i.e. Football Basketball Athletic Cricket swimming Summer coaching Dance coaching and Karate / Physical fitness are exempt from payment of GST under Entry No. 80 of Notification 12/2017 CTR dated 28th June 2017? - HELD THAT - They are registered under Section 12AA of the Income Tax Act and are providing training and coaching in Football Basketball Athletic Cricket swimming Karate Dance Physical fitness and summer coaching - Football Basketball Athletic Cricket swimming and Karate are sports and Dance would be covered under Arts. However Physical fitness can neither be considered as sports nor Arts or culture. Further the term summer coaching is a general term which cannot be said to cover sports Arts or culture. The training and coaching in Football Basketball Athletic Cricket swimming Karate Dance by the applicant would be covered under Entry No. 80 of Notification No. 12/2017-CTR dated 28.06.2017 as amended and Physical fitness training and summer coaching are not covered under the said Entry No. 80 mentioned above. Therefore the benefit of exemption as per Entry No. 80 of Notification No. 12/2017 - CTR dated 28.06.2017 as amended will be available to the applicant only in respect of training and coaching in respect of Football Basketball Athletic Cricket swimming Karate and Dance.
Issues Involved:
1. GST liability on Entrance/Admission fees, Annual Subscription fees, and Annual Maintenance fees collected from members. 2. Exemption from GST for fees collected towards training/coaching in recreational and sports activities under entry no. 80 of notification 12/2017-CTR dated 28th June, 2017. Detailed Analysis: Issue 1: GST Liability on Fees Collected from Members Applicant's Contention: - The applicant, a non-government sports organization, argues that fees collected from members (Entrance/Admission fees, Annual Subscription fees, and Annual Maintenance fees) should not be subject to GST based on the principle of mutuality. They assert that the club and its members are the same entity, and therefore, transactions between them do not constitute a supply under GST law. - They cite various legal precedents, including the Supreme Court's decision in State of West Bengal v. Calcutta Club Ltd., which upheld the principle of mutuality, stating that services by a members' club to its members amount to services to oneself and are not taxable. Authority's Findings: - The definition of "supply" under Section 7 of the CGST Act was amended to include transactions between a person (other than an individual) and its members as a supply, thereby nullifying the principle of mutuality for GST purposes. - The amendment, effective from January 1, 2022, clarifies that clubs and their members are distinct persons, and transactions between them are deemed to be supplies. - The term "business" under Section 2(17) of the CGST Act includes activities by clubs for a subscription or other consideration, regardless of profit motive. - Consequently, Entrance/Admission fees, Annual Subscription fees, and Annual Maintenance fees collected from members are liable to GST. Issue 2: Exemption from GST for Training/Coaching Fees Applicant's Contention: - The applicant provides training/coaching in various sports and recreational activities and claims exemption from GST under entry no. 80 of notification 12/2017-CTR, which exempts services by way of training or coaching in recreational activities relating to arts or culture or sports by charitable entities registered under section 12AA of the Income-tax Act. Authority's Findings: - The applicant is registered under section 12AA of the Income-tax Act and provides training/coaching in sports such as Football, Basketball, Athletic, Cricket, Swimming, Karate, and Dance. - Entry no. 80 of notification 12/2017-CTR exempts training or coaching in recreational activities related to arts or culture or sports by charitable entities. - Training/coaching in Football, Basketball, Athletic, Cricket, Swimming, Karate, and Dance qualifies for the exemption. - However, training in Physical fitness and general "summer coaching" does not qualify for the exemption as they do not specifically relate to arts, culture, or sports. Order: 1. GST Liability on Fees Collected from Members: - Entrance/Admission fees, Annual Subscription fees, and Annual Maintenance fees collected from members are liable to GST. 2. Exemption from GST for Training/Coaching Fees: - Exemption under entry no. 80 of notification 12/2017-CTR is applicable only to training/coaching in Football, Basketball, Athletic, Cricket, Swimming, Karate, and Dance. - Training in Physical fitness and general "summer coaching" does not qualify for the exemption and is liable to GST.
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