GST on Charitable and Religious trusts

As per Notification No. 12/2017-Central Tax (Rate) dated 28^th June 2017, vide Entry no.1, Services provided by an organization registered under sections 12AA/12AB of the Income-tax Act, 1961, for the purpose of conducting charitable activities are exempt from the imposition of Goods and Services Tax (GST).

Additionally, it's worth noting that charitable activities, as defined in this context, includes activities related to the promotion of religion, spirituality, or yoga. These activities also fall under the exemption from Goods and Services Tax (GST).

Inclusions of Exemption Notification

1. The fee or any other form of consideration collected from participants for their involvement in a religious, yoga, or meditation program or camp aimed at promoting religion, spirituality, or yoga, will be eligible for exemption from taxation.
2. Residential programs or camps, where the fee covers both lodging and meals, will qualify for exemption, provided that the primary and predominant focus of these residential programs or camps is the promotion of religion, spirituality, or yoga.

Exclusions of Exemption Notification

1. Nonetheless, if charitable or religious trusts primarily engage in providing accommodation or offering food and beverages in exchange for any form of consideration, including donations, such activities will be subject to taxation. Similarly, activities like organizing fitness camps or classes such as aerobics, dance, music, and the like, will also be subject to taxation.

Example:

ABC Trust is a registered charitable organization under section 12AB of the Income-tax Act, 1961, dedicated to improving the well-being of elderly individuals in the community. As part of their charitable activities, the trust organizes a 'Meditation Camp' for senior citizens, aimed at promoting physical and mental health, relaxation, and overall well-being.

In this case, since ABC Trust falls under section 12AB of the Income-tax Act, 1961and their 'Meditation Camp' is organized solely for charitable purposes to benefit elderly individuals, the services they offer during the camp are exempt from GST.

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