2019 (11) TMI 420 - AAAR - GST

Service or not - whether the activities, undertaken by the Respondent by way of organizing the Leadership program exclusively for their Lion members, can be considered as service or not? - meaning of services provided in the Section 2(102) of the CGST Act, 2017 - Challenge to AAAR decision - mistake apparent on record - HELD THAT - We agree with the Respondent s submissions to the extent that membership fee collected by them will not subject to the GST and only the registration fee charged from the members for participation in the training programs/workshops will be subjected to GST. In light of the apparent mistake in the original order dated 23.04.2019, we proceed to amend the said original AAAR Order as per the provision of Section 102 of the CGST Act, 2017. Thus, original AAAR decision is amended as 'the membership fee, collected by the Respondent from its members, will not construed as consideration for levy of GST; rather it is the registration fee, collected by the Respondent from its members for organising the skill oriented workshops, will be construed as consideration against the supply made by the Respondent to its members, and accordingly will be leviable to GST, while maintaining that Lions Club of Poona Kothrud, on account of the activities i.e. organising training programs/workshops for its members, is liable to take registration for discharging their GST liability'.

Summary

Issues:
1. Interpretation of provisions under CGST Act and MGST Act.
2. Applicability of GST on membership fee collected by the Lions Club.
3. Determining consideration for GST levy on training programs/workshops.

Analysis:
1. The judgment clarifies that unless specifically mentioned, provisions under the CGST Act also apply to the MGST Act. This ensures uniformity in interpretation and application of both Acts.

2. The appeal concerned whether the membership fee collected by the Lions Club should be subject to GST. The Respondent argued that the fee was used solely for administrative expenses and not for providing benefits to members like leadership programs. They provided evidence of fee utilization and highlighted that separate registration fees were charged for skill-oriented workshops.

3. The discussion focused on whether the leadership programs organized by the Lions Club for its members constituted a service under the CGST Act. The judgment cited the wide definition of services under the Act, encompassing activities beyond goods and money. It was concluded that the leadership programs qualified as a service provided to members, subject to GST if the annual turnover exceeded the threshold.

4. The consideration aspect was examined to determine if the membership fee constituted consideration for the services provided. The judgment analyzed the definition of consideration under the CGST Act, emphasizing that the fee collected was for organizing leadership programs and other skills workshops. However, upon revisiting the facts and submissions, it was found that the membership fee was not directly linked to the training programs.

5. The Respondent's submissions, supported by documentation, clarified that the membership fee was used for administrative expenses and not for organizing training programs. The judgment acknowledged the mistake in the original order and amended it to clarify that only the registration fee for workshops would be subject to GST, not the membership fee.

6. The final order amended the original decision, exempting the membership fee from GST and specifying that only the registration fee for skill-oriented workshops would be leviable to GST. The Lions Club was directed to register for GST to fulfill their liability arising from organizing training programs for members.