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TMI Blog2022 (5) TMI 1354X X X X Extracts X X X X X X X X Extracts X X X X ..... 80 of notification 12/2017-CTR dated 28th June, 2017? a. Football / Basketball/ Athletic / Cricket / Swimming coaching fees b. Summer coaching fees c. Dance coaching d. Karate / Physical fitness At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT FACTS: 2.1 M/s Navi Mumbai Sports Association ("the Applicants/Association") is a Non-Government Sports Organization & Public Charitable Trust registered under The Societies Registration Act, 1860 VIDE Registration 03.02.1981 & The Bombay Public Trust Act, 1950 vide registration dated 07.04.1981. The Association holds a valid registration under section 12AA of the Income Tax Act, 1961 2.2 The association has constructed international sports complex on land allotted by M/s C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... joining are required to pay one time admission / entrance fees based on the type of membership & the same shall form part of corpus of the applicant trust / association. 2.6 Apart from entrance/ admission fees, the association also collects various fees such as : Annual subscription & Annual maintenance fees ; Sports Activity Fees ; Training / coaching fees ; Hire charges for Banquet Hall/ Open ground/ Conference Room & Royalty from caterers/decorators. 2.7 The amounts collected by way of various fees stated here in above are pooled together for Convenience and it is not expected to generate any surplus from it. Association, being a charitable entity, aims only at furtherance of its object. it also receives donation from patrons for its charitable activities and to foster its objects. 2.8 The applicant is currently charging and collecting GST on the all receipts/ fees except on fees received for training and coaching services provided in various sports in view of exemption under entry 80 of notification 12/2017-CTR dated 28th June, 2017. 2.9 Based on various court pronouncements & rulings, few members are of the view that GST is not leviable on the annual subscription & mainten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Based on principle of mutuality, an association and its members are the same person and hence the transaction between club/association and it's member does not get cover under entry 2 of schedule Ito be treated as "supply", as well. 2.10.6 The Principle of Mutuality applies to all taxes i.e. Income Tax, VAT/ Sales Tax and Service Tax, alike and the courts of law have expounded and illustrated this principle in details, and the case laws are mentioned and relied upon as under:- * Decision of Hon'ble Jharkhand High court in case of Ranchi Club Ltd. v. Chief Commr (2012) 6 TMI 636. * Decision of the Hon'ble Mumbai CESTAT in case of Cricket Club of India Ltd. v. Commissioner of Service Tax (2015) 9 TMI 1389 and * Decision of the Hon'ble Gujarat High Court in the case of Sports Club of Gujarat Ltd v. UOI (2013) 7 TMI 510. 2.10.7 The larger bench of Hon'ble Supreme court in case of STATE OF WEST BENGAL & ORS Vs. M/s. CALCUTTA CLUB LTD / RANCHI, CLUB LTD (2019) TIOL 449 observed at length the applicability of principal of mutuality & held that services by a members' club to its members amounts to services to self and would not qualify as a service that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RAINING / COACHING IN VARIOUS SPORTS ACTIVITIES IS ELIGIBLE FOR EXEMPTION UNDER ENTRY 80 OF NOTIFICATION 12/2017-CTR 2.12.1 Applicant, with view to promote their objectives provide training / coaching on basic/ advance courses to members and non-members for various sports activities such as badminton, table tennis, squash, swimming, cricket, basketball, football, dance, etc and charges fees for the same. 2.12.2 Notification 12/2017-CTR dated 28th June, 2017 vide entry 80 provides for exemption from payment of GST on services rendered by way of training or coaching in recreational activities relating to: (a) Arts or culture or (b) Sports by charitable entities registered under section 12AA of the Income-tax Act 2.12.3 The applicant, a charitable entity registered u/s 12 AA of IT Act is eligible for exemption provided vide Entry no.80 of Notification 12/2017-CTR in respect of fees received by it towards rendering of training & coaching in various activities listed above. Hence, fees charged / collected from members/nonmembers for various coaching courses in sports is exempt from payment of GST under notification 12/2017-CT (Rate) dated 28th June, 2017. 2.13 Vide Additional Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no element of business in this activity and neither any services are rendered nor are any goods being traded against the said amount collected as annual subscription & maintenance fees and admission fees, etc from its members. 5.2.3 The term "supply" is defined under Section 7 of the CGST Act and was amended last, in the Budget 2021. Prior to the amendment "supply" was defined as : 7 (1) For the purposes of this Act, the expression "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal mode or agreed to be made for a consideration by a person in the course or furtherance of business; (b) the activities specified in Schedule I, made or agreed to be made without a consideration; and (c) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. ................................ (3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as- 1. a supply of goods and not as a supply of services; or 2. a suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.2.8 Therefore, 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. The principles of mutuality, which has been cited by the applicant to support its contention that it is not rendering any supply to its members and GST is not leviable on the fees collected from its members, is not applicable in view of the amended Section 7 of the CGST Act, 2017 and therefore, the applicant has to pay GST on the said amounts received from its members. 5.2.9 The reliance placed by the applicant on the orders of the Appellate Authority for Advance Ruling in the case of Lions Club of Pune Kothrud, is not proper as said order was passed prior to the amendment mentioned above. The words 'the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration' cover all types of activities/transactions of the present applicant. There is no list or limit or any restriction prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the question of profit motive does not arise in this case at all. 5.2.13 In view of the above we hold that the Entrance/Admission fees, Annual subscription & Maintenance fees etc are liable to tax under the GST Laws. 5.3 Vide the second question, the applicant is asking 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. 5.3.1 Entry No 80 mentioned above is reproduced as under:- Sr.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate Condition 80 Heading 9996 Services by way of training or coaching in recreational activities relating to- (a) arts or culture, or (b) sports by charitable entities registered under section 12AA of the Income-tax Act. NIL NIL 5.3.2 From a reading of the said Entry no. 80, we find that Services by way of training or coaching in recreational activities relating to- (a) arts or culture, or (b) sports by charitabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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