GST Applies to Sales and Fees Charged by Religious Trusts
Maharashtra AAR ruled that charitable trusts selling spiritual items or charging retreat fees are doing business and must pay GST.
- Ruling
- NO.GST-ARA- 41/2017-18/B- 48, Mumbai, dt. 14/6/2018
- Dated
- 14 Jun 2018
- 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
- Charitable trust asked if selling spiritual goods attracts GST.
- Trust asked if retreat accommodation and food fees count as taxable supply.
- Tax authority ruled profit motive is not required under GST law.
- Sales of goods and retreat fees are taxable supplies under GST.
- Income tax charitable exemption does not automatically grant GST exemption.
In short
A public charitable and religious trust argued that its main purpose is to spread spiritual teachings, not to earn a profit. To support its work, the trust sold items like spiritual books, audio CDs, statues, and charged fees for stay and food during spiritual retreats. The trust believed that because it has no profit motive and holds an income tax exemption, these activities should not count as business under GST.
What has changed
How it worked before
Many non-profit organisations and charitable trusts assumed that having an income tax exemption under Section 12AA made them completely exempt from GST. Businesses and trusts also believed that selling goods without a profit motive did not count as carrying on a business.
What has changed
The Maharashtra Authority for Advance Ruling ruled in order GST-ARA-41/2017-18/B-48 that GST law defines business broadly to include any trade or commerce, whether or not it is for profit. Selling spiritual goods and charging fees for retreat accommodation and food are taxable supplies under Section 7 of the Central Goods and Services Tax Act. The trust must register for GST under Section 22 if its total annual sales and fees cross the turnover threshold.
Who this affects
Charitable trusts, religious societies, non-profit organisations, and ashrams in India that sell goods or charge fees for retreats, stay, or food.
An example
A registered non-profit ashram in Pune sells yoga mats and spiritual literature while charging fixed daily fees for accommodation during wellness retreats. The ashram management assumes it does not need GST registration because all proceeds support free community healthcare. Based on the logic of this ruling, tax authorities can treat the mat sales and retreat fees as commercial business activities. If the ashram's combined collections from these activities exceed the annual GST limit, it must register and collect GST.
What you should do
Review all payments your trust receives from selling goods or charging fees for retreats and stay. A GST advance ruling binds only the trust that applied for it and its local tax office, so this order is not automatically law for everyone. However, if your trust conducts similar activities, consult a professional to calculate your total turnover and determine if you need to register for GST.
If you do nothing
Assuming an income tax exemption shields your trust from GST can result in unexpected tax demands. If tax officers audit your trust and classify your sales or fees as unregistered business turnover, you may be required to pay back-taxes with heavy interest and penalties. These unexpected liabilities can put severe financial stress on your organisation.
The terms explained
- taxable supply
- Any sale of goods or provision of services that attracts GST under the law unless specifically exempted by a government notification.
- aggregate turnover
- The total value of all taxable, tax-exempt, and export sales made by an entity across India in a financial year.
- input tax credit
- The GST you pay on your business expenses that you can deduct from the GST you collect on your sales.
- advance ruling
- An official tax decision given by authorities to a specific applicant clarifying how tax laws apply to their business.
The ruling in detail
Authority for Advance Ruling
Shrimad Rajchandra Adhyatmik Satsang Sadhana Kendra
NO.GST-ARA- 41/2017-18/B- 48, Mumbai, dt. 14/6/2018 · Maharashtra
Questions before the authority
- Whether the applicant which is a charitable trust with the main object of advancement of religion, spirituality or yoga can be said to be in business so as to attract the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017?
- Whether the applicant which is a charitable trust with main object of the advancement of religion, spirituality or yoga is liable to registration under the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017?
- Whether sales of spiritual products which is incidental / ancillary to main charitable object of the applicant can be said to be business of the applicant in terms of the definition in Section 2(17) of the Central Goods and Service Tax Act 2017 and option provision of Maharashtra Goods and Service Tax Act 2017?
- Whether the sale of spiritual products can be said to be supply under Section 7 of the Central General Sales Tax Act, 2017 and equivalent provision of the Maharashtra Goods and Service Tax Act, 2017 so as to attract GST?
Facts
The applicant is a public religious and charitable trust registered under Section 12AA of the Income Tax Act, 1961, engaged in spreading Jain philosophy and spiritual teachings. To support its objects, the trust sells spiritual products such as books, audio CDs, DVDs, statues, and magazines, and provides accommodation and food during Shibirs/Satsangs on a chargeable basis. The applicant contended that it lacks a profit motive and its activities do not constitute business under GST law.
Ruling
| Question | What the authority ruled |
|---|---|
| Charitable trust advancing religion/spirituality operating in business | Answered in affirmative. Business u/s 2(17) includes trade or commerce whether or not for pecuniary benefit. |
| Liability of trust to register under GST | Answered in affirmative. Provided aggregate turnover in a financial year exceeds limit prescribed u/s 22 of the GST Act. |
| Sale of spiritual products as business activity | Answered in affirmative. Incidental or ancillary transactions connected with main activity constitute business. |
| Sale of spiritual products as supply u/s 7 attracting GST | Answered in affirmative. Supplies of goods/services for consideration in furtherance of business attract GST. |
The AAR held that the applicant trust's sales of spiritual products and provision of accommodation and food for consideration fall within the definition of **business under Section 2(17)** of the CGST Act, regardless of profit motive. Consequently, these transactions constitute **taxable supplies under Section 7**, making the trust liable to GST registration under Section 22 if its aggregate turnover exceeds the threshold limit.
Reasoning
The authority observed that under Section 2(17) of the CGST Act, 2017, the definition of business is very broad and explicitly includes any trade, commerce, or similar activity **whether or not for pecuniary benefit**. Therefore, the absence of a profit motive does not remove an entity from the ambit of business. Selling spiritual products and charging participants for Shibir accommodation and food constitute commercial transactions for consideration. As these transactions are covered under Section 7 as supplies made in the course or furtherance of business, and exemption under Notification No. 12/2017-Central Tax (Rate) does not extend to sale of goods or commercial camp fees, GST is applicable.
Provisions relied on
- Section 2(17) of the CGST Act, 2017
- Section 2(84) of the CGST Act, 2017
- Section 7 of the CGST Act, 2017
- Section 22 of the CGST Act, 2017
- Section 23 of the CGST Act, 2017
- Section 24 of the CGST Act, 2017
- Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017
- Section 12AA of the Income Tax Act, 1961
For the practitioner
This ruling establishes that **registration under Income Tax Section 12AA does not grant automatic exemption** from GST on commercial sales or fees. Even non-profit religious or charitable trusts selling goods or providing paid Shibir services are conducting business under GST and must register and pay tax if aggregate turnover crosses statutory threshold limits.
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/mah_aar_41_2017-18_b-48_14.06.2018_srassk.pdf
Legibility of the scan, as read: high.
Prepared 19-10-2026.
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