GST Exemption for Tree Plantation by Charitable Institutions
The Gujarat Authority for Advance Ruling confirmed that tree plantation and maintenance by registered charitable institutions are exempt from GST.
- Ruling
- GUJ/GAAR/R/2025/64 dated 23/12/2025
- Dated
- 23 Dec 2025
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Sadbhavna Seva Foundation asked if tree plantation services are GST-exempt.
- The Authority ruled these activities qualify as environmental preservation.
- Registered charitable institutions are not liable for GST on these specific services.
In short
The Gujarat Authority for Advance Ruling (GAAR) examined whether a charitable institution must pay Goods and Services Tax (GST) on tree plantation and maintenance projects. The applicant, a non-profit organization, performs these services under a government scheme. The authority decided that because these activities help preserve the environment, they qualify for a tax exemption.
What has changed
How it worked before
It was previously unclear if all environmental projects performed by charitable trusts under government contracts qualified for the specific GST exemption for charitable activities.
What has changed
The authority confirmed that tree plantation and maintenance fall under the 'preservation of environment' category. This means that if your organization is registered as a charitable institution under the Income-tax Act, you do not need to charge or pay GST on these specific services.
Who this affects
Non-profit organizations, charitable trusts, and NGOs registered under Section 12AA or 12AB of the Income-tax Act that perform environmental conservation work.
An example
Imagine a local NGO, Green Earth Trust, which is registered under Section 12AB of the Income-tax Act. They sign a contract with the state government to plant trees along city roads. Based on this ruling, the Trust can argue that their service is exempt from GST. They should document their charitable registration and the nature of the work to support this position if questioned by tax authorities.
What you should do
This ruling only applies to the specific organization that asked the question. If you run a similar charity, you should consult with your tax advisor to see if your specific project structure qualifies for the same exemption, as a ruling is not a general law.
If you do nothing
If you assume this ruling automatically applies to your business and stop paying GST without a professional review, you risk being penalized for tax evasion. A tax officer may disagree with your interpretation of the law, leading to interest charges and legal disputes. Always verify your specific situation with an expert rather than relying on a ruling meant for another entity.
The terms explained
- Charitable Institution
- An organization registered under the Income-tax Act that operates for public benefit rather than for profit.
- Exemption from GST
- A status where a specific service or product is not subject to Goods and Services Tax, meaning no tax is collected or paid.
- Preservation of Environment
- Activities aimed at protecting, maintaining, or restoring natural resources and the ecosystem.
The ruling in detail
Authority for Advance Ruling
SADBHAVNA SEVA FOUNDATION
GUJ/GAAR/R/2025/64 dated 23/12/2025 · Gujarat
Questions before the authority
- Whether, in the facts and circumstances of the case, the entry no. 1 of Notification No. 12/2017 (as amended from time to time) applies to the charitable activity of plantation and maintenance of tree (more particularly described in the Statement of Relevant Facts), by the applicant being a Charitable Institution, duly recognized u/s. 12AA of the Income-tax Act, 1961 for Preservation of Environment?
- Whether, in the facts and circumstances of the case, the applicant being a Charitable Institution, duly recognized u/s. 12AA of the Income-tax Act, 1961, is liable to pay tax on charitable activity of plantation and maintenance of tree? If yes, then to what extent and at what rate?
Facts
The applicant is a non-profit company registered under Section 12AB of the Income-tax Act, 1961, engaged in charitable activities including tree plantation. They have been selected by the Government of Gujarat under the Harit Van Path Yojna to plant and maintain trees on a public-private partnership basis along roads and highways. The applicant sought a ruling on whether these activities qualify for GST exemption as charitable activities.
Ruling
| Question | What the authority ruled |
|---|---|
| Applicability of Entry 1 of Notification 12/2017 | Yes, it applies to the charitable activity of plantation and maintenance of trees. Subject to the applicant being a registered charitable institution under Section 12AA/12AB of the Income-tax Act. |
| Liability to pay GST | The applicant is not liable to pay tax on the charitable activity of plantation and maintenance of trees. Eligible for exemption from payment of GST under Notification 12/2017. |
The Authority ruled that the applicant's activities of tree plantation and maintenance qualify as charitable activities related to the preservation of the environment. Consequently, the services are eligible for exemption from GST under the relevant notification. The applicant is not liable to pay tax on these activities.
Reasoning
The Authority determined that the applicant is a registered charitable institution under Section 12AB of the Income-tax Act, 1961. It held that tree plantation and maintenance fall under the definition of charitable activities related to the **preservation of environment** as specified in the notification. Relying on the National Forest Policy, 1988, the Authority concluded that these activities are essential for environmental stability. It also cited a previous ruling in the case of Vikas Centre for Development to support the **exemption from GST** under Entry 1 of Notification No. 12/2017.
Provisions relied on
- Section 97(2) of CGST/GGST Act, 2017
- Section 12AA/12AB of the Income-tax Act, 1961
- Entry No. 1 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017
For the practitioner
This ruling confirms that tree plantation and maintenance services provided by a registered charitable institution are **exempt from GST**. It provides a clear precedent for NGOs and charitable trusts engaged in environmental conservation projects under government schemes. Practitioners should note that the exemption is strictly contingent upon the entity holding valid registration under Section 12AA or 12AB of the Income-tax Act.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/5-sadbhavana_seva_foundation.pdf
Legibility of the scan, as read: high.
Prepared 12-10-2026.
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