Applicant: M/s Swayam

Fact of the case

The applicant is a charitable trust registered under section 12A of the Income Tax Act, 1961. It extends legal, medical, psychological and financial support to the women and their children surviving violence and abuse.The applicant also facilities training programmes and  workshops for the survivors.

The applicant does not charge any consideration for facilitating the legal aid and other assistance.

Question on which advance ruling sought

Whether the applicant is liable to pay tax on its activities or not ?

Observations and findings of the Bench

Applicant is assisting the women survivors in various ways to get back on their feet. Survivors of sexual and other violence need services like legal aid, medical assistance, and vocational training. Recipient of such services is, therefore, not the applicant but the survivor woman.The applicant makes payments not to the supplier of the services, but as financial support in the form of reimbursement to the recipient survivor. Therefore, applicant is not liable to pay GST based on reverse charge mechanism on such payments.

The applicant does not charge any consideration for facilitating the legal aid and other assistance. Such activities of the applicant, therefore, does not result in ‘supply’ of service as defined under section 7 (1) of the GST Act. The applicant is not, therefore, liable to pay tax thereon.

RULING 

The applicant’s activities do not amount to ‘supply’ of service, neither is it a recipient of the services for which it often provides financial assistance to the women survivors of sexual and other violence. The applicant is, therefore, not liable to pay GST on the activities described in the application.

Read Order : 

http://gstcouncil.gov.in/sites/default/files/ruling-new/WB_AAR_03_2020-21_29.06.2020_Swayam.pdf