Amount Collected From Members as Subscription/ Fees is not Liable to GST

Case Covered:

Rotary Club of Mumbai Queens Necklace

Facts of the case:

This appeal is being filed by the Rotary Club of Mumbai Queens Necklace ( ‘the appellant’ or ‘the club’) against ruling no. GST-ARA-118/2018-19/B-46 dated 30.04.2019 pronounced by Maharashtra Authority for Advance Ruling.

The appellant, having Goods and Service Tax (GST) Registration No. 27AAABR0643JIZ is an unincorporated association of individuals. The club is affiliated to Rotary International, a worldwide organization with [520+] districts, [35000+] clubs, and [1.2 million plus] members. The object of Rotary is to encourage and foster the ideal of service.

Observations:

Hearing both the parties, We have also gone through the entire case records including the facts of the case, rulings pronounced by AAR, and the written submissions made by the Appellant as well as by the Respondent.

On perusal of the entire case records, the moot issue in the present case is whether the membership/subscription fees, admission fees collected by the Appellant from its members will be subject to GST or not. In other words, whether the transaction between the appellant and its members can be construed as supply as envisaged under section 7 of the CGST Act, 2017 or otherwise.

Thus, on perusal of the above submissions and the financial statements, it is observed that the 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. Thus, we conclude that the Appellant is not doing any business as envisaged under section 2(17) of the CGST Act, 2017.

Now, once it has been established that the Appellant is not doing any business in terms of section 2(17) of the CGST Act, 2017, it can be deduced that activities carried out by the Appellant would not come under the scope of supply as envisaged under Section 7(1) of the CGST Act, 2017.

Order:

We, hereby, hold that the amount collected as membership subscription and admission fees from members is not liable to GST as the supply of service.

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