Swayam, In re [03/WBAAR/2020-21]
Ruling by: Authority for Advance Ruling, West Bengal
Facts:
The applicant was a charitable trust under section 12A of Income Tax Act, 1961 and provided legal, medical, psychological and financial support to the women and their children surviving violence and abuse. The applicant was also undertaking various training programmes for such survivors. He was charging from the survivors depending upon their financial condition.
Issue:
He wanted to know whether tax is applicable on such activities.
Decision:
The 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. Thus, there was not any requirement to pay GST on reverse charge mechanism on such payments. Moreover, the element of consideration was absent for facilitating the legal aid and other assistance thus, it does not result in ‘supply’
