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TMI Blog2021 (11) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... t has to pay GST on the said amounts received from its members. The meetings conducted by the applicant which includes food, refreshment, etc. are nothing but activities carried out by the applicant for its members and therefore we hold that, contributions from the members, recovered for expending the same for the weekly and other meetings and other petty administrative expenses incurred including the expenses for the location and light refreshments, amounts to or results in a supply, in the subject case - The impugned activities performed by the Applicant for the welfare activities of its members which includes meetings with food and refreshment, etc., is a service rendered by the Applicant to its members as per the definition of the term services . In the instant case, the monthly contribution made by the members to the association is in return for receiving the services of the Applicant Club. The money collected by the Appellant from its members is used to procure services and goods from a third party and provide the benefits of such procured goods and services to the members of the association. Under GST, the term person has been defined in Section 2(84) of the CGST Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes of this Advance Ruling, the expression GST Act would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT FACTS: The submissions made by the applicant are as under:- 2.1 The applicant club is affiliated to Rotary International which is an International organization whose stated purpose is to bring together business and professional leaders in order to provide humanitarian service and to advance goodwill and peace around the world. 2.2 Applicant Club receives fees from its members: purely to defray its expenditure on meetings and communication, Rotary International (RI) per capita dues, subscription fees to the Rotarian or Rotary Regional magazine, district per capita dues, club annual dues, etc. Rotary Club holds Programs, Seminars and Institutes, for Leadership Development and other forums and these programs are only for Rotary Club members and non-members are not allowed to take part. Thus, funds received from members are utilized for mutual benefit of members. The administration and working of the Club and implementation of policies are established and are implemented on the concept of mutuality. 2.3 As per Section 9 of CGST Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, thus, clear that the Applicant is doing business as defined under section 2(17) (e) of the GST Act. The subscription and fellowship dues are to be considered as consideration for the supply of such services, which are classifiable under SAC Heading 99959 under the category Services furnished by other membership organization . 3.3 In the instant case applicant is not noticed to he registered as charitable trust. Also the activities undertaken by the Applicant do not conform entirely to the definition of charitable activity. Activities of training workshops or meetings for personality/ skill development out of subscription/ fellowship dues are only for members and not for people mentioned in above definition of charity. At best, the activities undertaken by the Applicant may be broadly defined as social welfare activities. Such activity by an entity is an adventure and may be treated as a business under Section 2(17) (a) of the GST Act, and a taxable supply of service in consideration is charged from the recipient. The term business under GST Act includes, under Sec 2(17)(a) (b) a) Any trade, commerce, manufacture, profession, vocation, adventure , wager or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in the matter was held on 22.06.2021. Authorized Representative of the applicant, Shri. Abhay Upadhye, CA was present. Jurisdictional officer Shri. Shyam Raghute, ACST, NAG-VAT-D-10 was also present. The Authorized Representatives made oral submissions with respect to admission of their application. 4.2 The application was admitted and called for final e-hearing on 29.10.2021. Authorized Representative of the applicant, Shri. Abhay Upadhye, CA was present. Jurisdictional officer Shri. Shyain Raghute, ACST, NAG-VAT-D-1 0 was also present. Both the sides have made oral as well as written submissions. 4.3 We heard both the sides. 05. DISCUSSIONS AND FINDINGS: 5.1 We have perused the documents on record, facts of the matter and oral/written submissions made by both, the applicant as well as the jurisdictional officer. 5.2 The question raised by the applicant is with respect to the amounts collected as, as membership subscription and admission fees from its members to meet out the various expenses of the applicant viz; meeting expenses, communication expenses, Audit fees, Rotary International (RI) per capita dues, subscription fees to the Rotarian or Rotary region ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing clause was to be inserted and deemed to have been inserted with effect from the 1st day of July, 2017, namely: (aa) 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. Explanation.-For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any court, tribunal or authority, the person and their members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another; . 5.8 The amendment mentioned above has received the assent of the President of India on the 28 th March, 2021 and in view of the same the issue of principles of mutuality in the case of cooperative societies like the applicant has been settled. 5.9 As per section 2(84) the term Person includes (a) an individual . (f) an association of persons or a body of individuals, whether incorporated or not, in India or outside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All the other case laws relied upon, also do not provide any guidance on the legal situation, particularly after the amendment. 5.13 We further refer to Section 2(102) of the CGST Act which defines services to mean anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. The impugned activities performed by the Applicant for the welfare activities of its members which includes meetings with food and refreshment, etc., is a service rendered by the Applicant to its members as per the definition of the term services mentioned above. 5.14 To be taxable under GST laws, the services must be supplied in the course or furtherance of their business. The term business is defined under Section 2(17) of the CGST Act includes,- e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; . 5.15 Clause (e) of the above said definiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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