• Notification Date: 13-11-2021
  • Notification No: 28/2021-22

18% GST Payable on Donation/Grant Amounts received from bodies including Central and State Govt: AAR

The Maharashtra Authority of Advance Ruling (AAR) declared that 18% GST payable on amounts received in the form of Donations or Grants received from various entities including Central and State governments.

The applicant, Jayshankar Gramin VA Adivasi Vikas Sanstha Sangamner is a Charitable trust registered under Maharashtra Public Charitable Trust Act 1950.

The Trust is also registered under Societies Act vide registration number Maha/2041/92 w.e.f. 23/12/1992. The applicant is registered under section 12AA of the Income Tax Act 1961.

The trust takes care of the services of 50 orphans and homeless children by providing shelter, education, guidance, clothing, food, and health and works towards the Women and Child welfare. The Govt Maharashtra women and child welfare department pays an amount of Rs. 2,000/ per month per child. Other expenses for children are made spent from donations. The trust is registered under the section 80G (5) of the Income Tax Act. The trust also provides services to destitute women who are litigating divorce or homeless or the victim of domestic violence.

The Central Government also gives grants through the Women and Child Welfare Ministry for offering shelter, food, and medical facilities, clothing etc., to the deprived women who are victims of domestic violence or are divorcees or are homeless and also to victims of rape or other crimes. The trust represents them before legal counsels including lodging FIR at police stations against the culprits, The trust also arranges for counseling from counselors to bring them out of the trauma and help them lead a normal life.

The applicant has demanded the advance ruling on the issue of whether the applicant is liable to pay GST on the amounts received in the form of Donations / Grants from various entities including the Central Government and State Government.

The Coram of Rajiv Magoo and T.R.Ramnani passed the decision that in case of donations, if the gift or donation is made to a charitable organization; and is not for any commercial gain and is not an advertisement, then GST is not payable . In all other cases, GST is payable and would be charged at the rate of 18%.