Whether applicant engaged in the activities of prevention, mitigation and management of disaster is required to be registered under the Act.

PJ/Case Law/2020-2021/3559

M/s All India Disaster Mitigation Institute (AAR Gujarat) GUJ/GAAR/R/20/2019 dated 11.09.2019
Brief Facts: The applicant is a charitable trust registered under the Bombay Public Trust Act, 1950. It was established for community based research, policy analysis, planning and technical assistance for the purpose of enhancing prevention, mitigation and management of disasters and reorientation of relief and reconstruction to local initiatives.
The Applicant is duly registered as a charitable trust under Section 12AA of the Income Tax Act, 1961 as well as under Section 80G of the Income Tax Act.
Issue:Whether applicant engaged in the activities of prevention, mitigation and management of disaster is required to be registered under the Act.
Applicant’s Contention:The applicant points out the contracts that are being entered in the past that they are in line with the purpose of achievement of objectives. Moreover, the applicant mentioned that the funds for such activities were being raised through donations, grants and fees towards contracts. They are also registered under Section 12AA and Section 80G of the Income Tax act.
Therefore, referring to the above facts the applicant contends that they are not engaged in supply/business and so not required to take registration under GST. Further reference has been made to the definition of ‘Aggregate Turnover’ [section 2(6)], ‘Business’ [section2(17)] and ‘Supply’ [Section 7]. The applicant has given references to judgements of many high courts and supreme court judgement in the case of Commissioner of Sales Tax V/s Sai Publication Fund wherein decisions were passed in favour of the applicant.
The applicant has further submitted that even if the activities qualify as supply transactions, then they are services by way of Charitable activities which are fully exempt from tax as per Entry No. 1 of Notification No. 12/2017-Central tax (Rate) dated 28.06.2017.

Reasoning of Judgement:The authority finds that the activities of the applicant relating to disaster prevention, disaster mitigation and disaster management are activities relating to “preservation of environment”. Thus, they are considered as charitable activities and hence, activities of the applicant, being registered under Section 12AA of the Income Tax Act, 1961, exempt from tax under the GST Acts, by virtue of Entry No. 1 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 as mentioned above. Consequently, the applicant is not liable to registration in respect of charitable activities relating to preservation of environment which attracts nil rate of GST, by virtue of Section 23(1) (a) of the Central Goods and Services Tax Act, 2017.
Comment:-The activities mentioned above are being performed by the person who is registered under section 12AA of the income Tax Act 1961 and are considered as charitable. So they are not liable to registration under the GST Act.

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PJ/Case Law/2020-2021/3559

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