One stop crises Centre Scheme
Case Title | Jayshankar Gramin & Adivasi Vikas Sanstha |
Court | Bombay AAAR |
Honorable Judges | Member Ashok Kumar Mehta And Member Rajeev Kumar Mital |
Citation | MAH/AAAR/AM-RM/09/2022-23 2022 (9) GSTPanacea 385 HC Bombay |
Judgement Date | 21-September-2022 |
Council for Petitioner | Durgesh Kalantri |
Council for Respondent | NA |
Section | 2(17),2(13),2(102),100,101,7,7(1)(a) |
In Favour of | In Favour of Appellant |
The Maharashtra Bench of Member Ashok Kumar Mehta & Member Rajeev Kumar Mital has held that amount reimbursed by the government to the Appellant is in the nature of subsidy, it is concluded that the said reimbursement amount cannot be construed as “consideration” nor “Supply”.
Since it has been established that the subject activities undertaken by the Appellant will not be construed as supply, same will have no bearing on the applicability of GST on the impugned transactions/activities.
One stop crises Centre Scheme
FACTS OF THE CASE
The Appellant is a charitable trust registered under Maharashtra Public Charitable Trust Act, 1950, The Appellant is also registered under Section 12AA of the Income Tax
The trust also renders services under “One stop crises centre” scheme ntroduced by Ministry of Women and Child Development to destitute women who are litigating divorce, or homeless, or the victims of domestic violence. Central Government also gives grants through Women & Child Development Ministry for awarding shelter, food, medical facilities, clothing, etc. to these destitute women who are the victims of domestic violence, or are divorcee, or are homeless, or are the rape victims
Under the “’One Stop Crises Centre” Scheme, the Appellant was selected as an implementation agency vide “Aadesh bearing number 686/19- 20 dated 28.05.2019”. Further, a grant of amount up to Rs. 2.00,000/- per month was approved under the said scheme wherein the trust will only act as an implementing agency, and will use grant amount in specified manner
Further, the amount up to Rs. 2,00.000/- is granted only after presentation of list of expenses incurred. Therefore, the grant amount is in nature of reimbursement of expenses incurred on behalf of Ministry of Women and Child Development. It is submitted that if monthly expenses incurred are less than the said limit, in that case, the lesser amount, which is incurred actually, is granted.
Since the Appellant was not sure of the GST applicability of the “One Stop Crises Centre”, an application was made with the Authority of Advance Ruling for the GST, Maharashtra (MAAR) for the purpose to ensure if the aforementioned transactions are liable to GST or not.
The MAAR passed an order bearing No.GST-ARA-97/2019-20/B-91 dated 10.11.2021 confirming the GST applicability on the impugned transactions.
Aggrieved by the aforesaid Advance Ruling passed by the MAAR, the Appellant has preferred the present appeal before the Maharashtra Appellate Authority for Advance Ruling
Aggrieved by the aforesaid Advance Ruling passed by the MAAR, the Appellant has preferred the present appeal before the Maharashtra Appellate Authority for Advance Ruling
That MAAR, in their observations and findings in point numbers from 5.5 to 5.13 in the impugned Advance ruling order, has made a reference to the exemption Notification No. 12/2017 dated 28.06.2017 with regard to the charitable activities; that the MAAR has righteously noted that the main thrust is to identify as to whether the impugned activities are covered under the definition of charitable activities, or not. However, the MAAR has missed on the interpretation of the essence of the definition of religion and rather they have vested their thought process on the other charitable activities as mentioned in the said notification.
That the activities of supply by the Appellant trust is fully exempted from levy of tax in terms of the entry at SI. No. 1 of Notification No. 12/2017 dated 28.06.2017
One stop crises Centre Scheme
COURT HELD
Considering the facts as recorded, held that it has been established that the subject amount reimbursed by the government to the Appellant is in the nature of subsidy, it is concluded that the said reimbursement amount cannot be construed as “consideration” in terms of its definition provided under Section 2(31) of the CGST Act, 2017. which has been reproduced hereinabove.
Bench, hereby, set aside the Ruling passed by the MAAR by holding that since the impugned activities undertaken by the Appellant are not construed as “supply” in terms of section 7(1 )(a) of the CGST Act, 2017, the reimbursement amount paid by the Maharashtra Government to the Appellant for undertaking the activities specified under “One stop Crises Centre Scheme” floated by the Central Government, will not be subject to the levy of GST.
Thus, the Appeal filed by the Appellant stands disposed of in above terms.
One stop crises Centre Scheme
ANALYSIS OF THE JUDGEMENT
The Appellant are being granted a fixed amount of money from the Government of Maharashtra under the “One stop crises Centre Scheme” for taking overall care of the destitute women who are litigating divorce, or homeless, or the victims of domestic violence. The said activities undertaken by the Appellant are clearly for the welfare of these destitute women, and thereby, serving the mankind in general. Hence, bench are of the opinion that the said amount of money reimbursed by the government to the Appellant is nothing but subsidy as the entire money is being spent in the activities which are advantageous to the public
it has been established that the subject amount reimbursed by the government to the Appellant is in the nature of subsidy, it is concluded that the said reimbursement amount cannot be construed as “consideration” in terms of its definition provided under Section 2(31) of the CGST Act, 2017. which has been reproduced hereinabove
Further, in absence of any consideration, it is opined that the subject transactions/activities undertaken by the Appellant, wherein they are providing various assistances, such as food, shelter, legal assistances, medical assistances, etc., to the destitute women, would not be construed as supply in terms of Section 7(1)(a) of the CGST Act, 2017, which stipulates that for any transactions/activities to be considered as supply, there has to be an element of “consideration”. In absence of the same, such transactions/activities will not be considered as “supply”.
Since it has been established that the subject activities undertaken by the Appellant will not be construed as supply in terms of section 7(1 )(a) of the CGST Act, 2017,
Bench will not proceed to examine the third moot issue as to whether the impugned activities undertaken the Appellant can be construed as “charitable activities” in terms of the clause (r) of the definition section of the Notification No. 12/2017-C.T. (Rate) dated 28.06.2017 as the determination of the same will have no bearing on the applicability of GST on the impugned transactions/activities.
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ayshankar Gramin & Adivasi Vikas Sanstha
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