Rotary Club of Mumbai Queens Necklace, In re [MAH/AAAR/SS-RJ/15/2019-20]
Ruling by: Appellate Authority for Advance Ruling, Maharashtra
Facts:
M/s. Rotary Club of Mumbai Queens Necklace was an unincorporated association of individuals with the object to encourage and foster the ideal of service. The Rotary Club used to bring together people to exchange ideas, build relationships, and take action, supports Rotary clubs worldwide by coordinating global programs, campaigns, and initiatives and uses generous donations to fund projects by Rotarians. The receipts of the club majorly consist of Fees from members which in essence is contribution towards yearly expenses and One time admission Fees from New Members.
Issue:
The issue was whether the amount collected as membership subscription and admission fees from members is liable to GST as supply of services and if liable can input tax credit be claimed of the tax paid on the Banquet and Catering services for holding members meetings and various events?
Decision:
The scope of supply was discussed and it was settled that any activity/transaction to be qualified as supply, the same should be undertaken in the course or furtherance of business. Then the definition of business was referred in which it is mentioned that a business includes provision by club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members. It was observed by the Authority that Appellant is not providing any specific facility or benefits to its members against the membership subscription charged by it, as the entire subscription amount is spent towards meetings and administrative expenditures only. On the basis of this, it was concluded that appellant in the instant case was not conducting any business. Now, the activities carried out by appellant would not come within the ambit of supply. Moreover, the membership fees was in the nature of reimbursement for the meetings and administrative expenditures and if same was considered to be supply then it would suffer double taxation since the amount spent towards the meetings and administrative expenditures was already subjected to GST at the hands of the suppliers of these input services or goods used in the meetings, events and other administrative functions of the Appellant.
Thus, it was ruled that amount collected as membership subscription and admission fees from members is not liable to GST as supply of services.
