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Conditions for exempting a charitable trust from GST
A charitable trust or non-profit organisation must satisfy specific criteria to be exempt from the Goods and Services Tax. The charitable trust or NGO must be registered under Section 12AA of the income tax Tax and the services it provides must be for a charitable purpose.
GST Compliance on NGOs and Charitable Trusts
- If a charitable trust runs training courses, yoga camps, or other training programmes that aren't free to participants, it's regarded a commercial activity and hence subjected to GST. The donation received for such an activity will also be subject to GST taxation. A charitable entity shall be free from GST if it offers instruction or coaching in recreational activities related to arts and culture or sports.
- The goods sold by a charitable trust are taxable. When purchasing the supply, the charitable trust must pay the applicable GST rate.
- If trusts run schools, colleges, or other educational institutions specifically for abandoned, orphaned, homeless children, physically or mentally abused people, prisoners, or individuals over the age of 65 who live in rural areas, these activities will be considered charitable, and the income from such supplies will be GST-Exampted.
- The GST regulation has chalked out GST exemptions for NGO, In case a charitable trust rents out religious meant for general public (managed and owned by a charitable trust registered under section 12AA of the Income Tax Act,). Goods and services tax will be exempted in the following case:
- In case the Rent out shops & other spaces for business are charged less than INR 10,000/- per month
- An open area or Kalyanamandapam is charged lesser than INR 10,000/- day
- If the Rent out rooms are charged lesser than INR 1,000/- day
Is GST registration necessary for a charitable-based pharmacy store operated by non-profit organizations?
THE AUTHORITY FOR ADVANCE RULING
The following: Concerns and supreme court decisions
1. When is the client to be a licensed, non-profit drug store operated by the Charitable Trust?
2. That any specific action was taken by the customer in connection with other goods or services, or both, leads to or results in the provision of goods or services, or both, in the sense of the term. (Bottom speed)
RULING : This is the GST registration for a pharmacy discount store owned by Charitable Trust
- Individual is expected to obtain GST registration under the applicable GST Act, 2017 provisions for a retail pharmacy store operated by Charitable Trust.
- Pharmacy Store, which offers medicines at a cheaper price, shall supply the goods in accordance with the applicable requirements of the GST Act 2017.
