GST on fee collected by 12AA AOP/BOI from its members, Goods and Services Tax - GST

[Mayank Jain]

Dear Experts

An association of persons (related to pathology) are registered under GST Act, Societies Registration Act,1860 and also holding Sec 12AA certificate under Income Tax Act. Which of the following Income/outward supplies will attract GST and which will be exempt:

1. Fee charged for making lifetime members.

2. Participation fee charged from members for participating in monthly programmes for the enhancement of quality of member pathologists in performing their lab diagnosis. (Non members not allowed to participate).

3. An annual conference in which anyone from medical pathologist can attend, whether a member or not of such AOP, so one has to pay the participation fee. Also medical companies can sponsor the event or be Co-sponsors by paying the sponsorship fee. Whether GST needs to be charged on such sponsorship fee or RCM provisions shall apply as per Notification 13/2017 dated 28.06.2017.

Can the above services rendered by such AOP are eligible for being covered under Entry No.1 of exemption notification 12/2017 dated 28.06.2017 relating to services rendered by an entity registered under Section 12AA of Income Tax Act, 1961 by way of charitable activities.

Will they be covered in the ambit of ‘charitable activities’ as defined in 2(r) of the Notification No.12/2017 dated 28.6.2017?

If possible please do site judgements (even if they relate to erstwhile Service Tax laws) other than IMA judgement) in support of your valuable views.

Thanks & Regards

Mayank Jain

Posts / Replies

[Amit Agrawal]

My ex-facie views:

1. Fee charged for making lifetime members.

Answer: Yes. GST is payable by AOP against such fees in view of Section 7 (aa) of the CGST Act, 2017 read with 'explanation' given thereunder, presuming that association is providing some kind of goods / services against membership so given.

2. Participation fee charged from members for participating in monthly programmes for the enhancement of quality of member pathologists in performing their lab diagnosis. (Non members not allowed to participate).

Answer: Yes. GST is payable by AOP against such participation fees.

3. An annual conference in which anyone from medical pathologist can attend, whether a member or not of such AOP, so one has to pay the participation fee. Also medical companies can sponsor the event or be Co-sponsors by paying the sponsorship fee. Whether GST needs to be charged on such sponsorship fee or RCM provisions shall apply as per Notification 13/2017 dated 28.06.2017.

Answer: GST is payable by AOP against such participation fees. W.r.t. services provided by way of sponsorship to any body corporate or partnership firm, GST is payable under Reverse charge basis and not by said AOP under forward charge basis.

Can the above services rendered by such AOP are eligible for being covered under Entry No.1 of exemption Notification 12/2017 dated 28.06.2017 relating to services rendered by an entity registered under Section 12AA of Income Tax Act, 1961 by way of charitable activities.

Will they be covered in the ambit of ‘charitable activities’ as defined in 2(r) of the Notification No.12/2017 dated 28.6.2017?

Answer: If you are talking above only three activities of AOP, as listed in above questions, same does not fulfil requirements of Entry No.1 of exemption notification 12/2017 dated 28.06.2017 read with definition given in Clause 2 (r) thereunder.

But, please consider Entry No. 77A of exemption notification 12/2017 dated 28.06.2017 while evaluating various activities carried by said AOP. And my answers above need to be read with this caveat.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.