Sale of Spiritual Products is a supply liable to GST : AAAR affirms AAR

Sale of Spiritual Products is a supply liable to GST : AAAR affirms AAR

Maharashtra Authority of Advance Rulings in matter of M/s Shrimad Rajchandra Adhyatmik Satsang Sadhana Kendra has ruled out that Sale of Spiritual Products is a supply as per GST Act liable to GST. Maharashtra Appellant Authority of Advance Rulings has affirmed the Order of Maharashtra Authority of Advance Rulings

Sale of Spiritual Products is a supply liable to GST : AAAR affirms AAR

The Extract of Order is Given below:

Thus, it is seen that certain services supplied by charitable trust are exempt from GST. A CBIC flier on 'GST on Charitable and Religious Trust' explains the scope of charitable activities which are exempted from levy of GST. It is clarified in the said flier that services of transportation of passengers, granting of advertisement rights, publication of the trust admission to event, all will be leviable to GST. There are also other notifications under CGST Act which provide specific exemption to certain services by charitable trusts. Entry No.10 of the Notification No.9/2017, dt.28.06.2017 under IGST Act, exempts the services received by charitable trust registered u/s.12AA of the IT Act, 1961, from the provider of services located outside India and the trust is not liable to pay GST on import of such services under Reverse Charge Mechanism. However, the exemption is not extended to OIDAR services received by charitable trust. There is also a specific exemption on services provided by charitable institution registered u/s.12AA of the IT Act, 1961, by way of advancement of religion, spirituality or yoga. Any fees or consideration charged from the participant for participating in religious program or Yoga meant for advancement of religion, spirituality or yoga is exempted. Further there is entry No.15 of Notification No.12/2017 dt.28.06.2017, where no GST is applicable on activities of public library including those run by charitable or religious trust.

What can be seen from the above notifications is that specific exemption from GST is given to charitable institutions registered u/s.12AA of the IT Act, 1961. It can be gathered from the above that the intention of the legislature is to tax all the activities of supply goods and services by charitable trust except those specifically exempted. This is with the background that charitable institutions qua their activities of charity do not lend themselves to any specific concession or exemption from the definition of 'supply' or 'business' or 'taxable person'. The very fact that certain services have been carved out and given out a special treatment makes it clear that all trade and commerce transaction of selling books, statutes, CDs and DVDs etc. done commercially for consideration come within the broad ambit of 'business' under the CGST Act.

In the grounds of appeal, it is contended by the appellant that the ARA has not taken cognizance of the Supreme Court judgment in the case of Sai Publication (Appeal No.9445 of 1996 dt.22.03.2002). The said judgment is given under the provisions of the BST Act, 1959, and the definition of 'business' in the said Act is different from the definition under CGST Act. The definition under the CGST Act is wider than the one under the BST Act. Also the background of the Act and the structure of the statute which includes not just the Act but also the Rules, schedule and notification have to be considered. We have already discussed the various aspects of the charitable institutions with reference to the definition as well as the notification. This was not the case under the BST Act. Therefore, the judgment given by the Supreme Court is on different context. Under the BST Act, there were no notification providing specific exemption to charitable trusts which is very much there under the CGST Act. The rule of 'harmonious interpretation' says that that every statute has been made for a purpose and specific intent as per law and it should be read as a whole and interpreted accordingly. The aim of the courts are to make an interpretation which makes the enactment consistent and a construction which avoids inconsistency or repugnancy between the various sections or parts of the statute. In the present case, a reading of the GST Act/rules/notifications/exemptions show that the intent is to consider 'charitable/religious trusts' as taxable persons effecting taxable supply of goods/services and they have been given specific exemptions in some areas. As said earlier, the BST law had no such exemption provisions. Therefore, we say that the judgment is not applicable here nor the other judgments cited by the appellant which are also given under the provisions of the BST Act.

In view of the above discussion and findings, we pass the following order-

ORDER
(Under Section 101(1) of the CGST Act, 2017 and MGST Act, 2017)

For reasons discussed above, we do not find any reason to interfere with the order of the Advance Ruling Authority in this matter.