In the public interest, on the recommendations of the Council, the government has exempted certain services rendered by an entity registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) by way of charitable activities.
Please note, all charitable objects are not exempted from GST. In the notification, charitable activities have been defined, which is discussed below in this post. Only those activities mentioned as charitable activities in notification number 12/2017 are eligible for exemption from GST.
Public health services
Services provided by an entity registered U/s 12AA of income tax act, 2017 for public health by way of care or counseling of terminally ill persons or persons with severe physical or mental disability, persons afflicted with HIV or AIDS, persons addicted to a dependence-forming substance such as narcotics drugs or alcohol is exempt from GST.
GST exemption is also available if services are provided for public awareness of preventive health, family planning or prevention of HIV infection.
In addition to above, services by way of health care services by a clinical establishment, an authorised medical practitioner or para-medics and services provided by way of transportation of a patient in an ambulance is also exempted from GST.
Yoga and Advancement of spirituality
Services provided by an entity registered U/s 12AA of income tax act, 2017 for advancement of religion , spirituality or yoga are exempted from GST.
Which means, if the entity has arranged a programme on yoga or meditation then, the participation fee received shall be exempted from GST. For the purpose of advancement of religion, spirituality or yoga, if any other fee or money received by the entity then, such fee or money will also be exempted from GST.
Please note, activities such as fitness camp, aerobics classes, dance, music and any other programme which is not for advancement of religion, spirituality or yoga, are not exempted from GST, therefore will be taxable.
(iii) advancement of educational programmes or skill development relating to,-
(A) abandoned, orphaned or homeless children;
(B) physically or mentally abused and traumatized persons;
(C) prisoners; or
(D) persons over the age of 65 years residing in a rural area;
Rural area means the area comprised in a village as defined in land revenue records, excluding the area under any municipal committee, municipal corporation, town area committee, cantonment board or notified area committee; or any area that may be notified as an urban area by the Central Government or a State Government.
Based on entry number 1 of notification number 12/2017, activities of a school, college or an institution run by a trust which do not come within the ambit of charitable activities will not be exempted. In addition to entry number 1, we suggest also to have a look at entry number 66 to see if you are within it to get exemption.
As per entry 66 of notification number 12/2017, services provided –
(a) by an educational institution to its students, faculty and staff;
(b) to an educational institution, by way of,-
(i) transportation of students, faculty and staff;
(ii) catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory;
(iii) security or cleaning or house-keeping services performed in such educational institution;
(iv) services relating to admission to, or conduct of examination by, such institution; upto higher secondary:
Provided that nothing contained in entry (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent.
Charitable and/or religious trust registered under section 12AA of the income tax act, 1961 if provided any services for preservation of environment including watershed, forests and wildlife, then such service is exempted from GST.
All other services provided by the charitable and religious trust registered under section 12AA of the income tax act, 1961, will attract GST. If the charitable and religious trust is not registered under section 12AA of the income tax act, 1961, then all the services including the services listed above shall be taxable under GST.
Services by a specified organisation in respect of a religious pilgrimage facilitated by the Ministry of External Affairs, the Government of India, under bilateral arrangement.
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.
Religious Yatra and Pilgrimage
Religious yatra or pilgrimage organised by any charitable or religious trust are not exempt from GST. However as per entry number 60, services by a specified organisation in respect of a religious pilgrimage facilitated by the Ministry of External Affairs, the Government of India, under bilateral arrangement is exempted from GST.
Specified organisation for this purpose shall mean, –
- Kumaon Mandal Vikas Nigam Limited, a Government of Uttarakhand Undertaking; or
- ‘Committee’ or ‘State Committee’ as defined in section 2 of the Haj Committee Act, 2002 (35 of 2002);
Therefore, Religious yatra or pilgrimage organised by Kumaon Mandal Vikas Nigam Limited and Haj Committee and facilitated by Government of India, are exempted from GST.
Renting of religious place meant for general public
Services by a person by way of-
(b) renting of precincts of a religious place meant for general public, owned or managed by an entity registered as a charitable or religious trust under section 12AA of the Income-tax Act, 1961 (hereinafter referred to as the Income-tax Act) or a trust or an institution registered under sub clause (v) of clause (23C) of section 10 of the Income-tax Act or a body or an authority covered under clause (23BBA) of section 10 of the said Income-tax Act:
Provided that nothing contained in entry (b) of this exemption shall apply to,-
(i) renting of rooms where charges are 1,000 rupees or more per day;
(ii) renting of premises, community halls, kalyana mandapam or open area, and the like where charges are 10,000 rupees or more per day;
(iii) renting of shops or other spaces for business or commerce where charges are 10,000 rupees or more per month.
Religious place as defined in the notification means a place which is primarily meant for conduct of prayers or worship pertaining to a religion, meditation, or spirituality. General public means the body of people at large sufficiently defined by some common quality of public or impersonal nature.
Additional cases where GST exemption to charitable and religious trust is allowed
Services by way of training or coaching in recreational activities relating to arts or culture, sports by charitable entities registered under section 12AA of the Income-tax Act are exempted from GST. Please note, only activities related to arts, culture and sports are exempted. If the training or coaching in recreational activities related to areas other than arts, culture or sports, then it will not be exempted.
Goods and/or services provided by a supplier who is not a charitable or religious trust, to a charitable or religious trust are not exempted from GST unless its specifically exempted by GST law.
As per entry 13(a) of notification no 12/2017, Services by a person by way of conduct of any religious ceremony is exempted from GST. It’s applicable to all not restricted to charitable or religious trust. For example, if Mr A charged Rs 10,000 for conducting religious ceremony on the marriage of Mr A’s daughter then, such amount for conducting marriage ceremony will not be taxed under GST as it is exempted. If the activities are other than conduct of religious ceremony then, it will be taxable.