GST on Non Profit Training Fees Maharashtra AAR Ruling
The Maharashtra AAR ruled that non-profit co-operative apex bodies charging training fees to members must pay 18% GST.
- Ruling
- NO.GST-ARA- 11/2018-19/B- 70 dated 18/07/2018
- Dated
- 18 Jul 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
- A co-operative training body asked if member training fees are exempt from GST.
- The authority ruled that training services provided for a fee are taxable.
- Non-profit status and statutory duties do not grant automatic GST exemption.
- Training services provided to member entities attract 18% GST.
In short
A state-level co-operative apex body in Maharashtra provided mandatory education and training to member societies. It charged training fees and annual subscriptions to cover expenses as required by state co-operative law. The society argued that because it is a non-profit body performing a statutory duty, its training programs should be exempt from GST.
What has changed
How it worked before
Before this ruling, many non-profit bodies and statutory associations assumed that training programs mandated by state law were exempt from GST. Organizations believed charging fees to members solely to cover operating costs did not count as a taxable commercial activity.
What has changed
The Maharashtra Authority for Advance Ruling ruled under Order NO.GST-ARA- 11/2018-19/B- 70 Mumbai that charging fees or member contributions for training is a taxable supply of service. Since the society is not directly funded by government grants and does not meet the criteria of a recognized educational institution serving its own enrolled students, it must collect 18% GST under commercial training services.
Who this affects
Co-operative federations, trade associations, non-profit institutions, and statutory bodies that collect fees or member subscriptions to conduct training programs.
An example
Consider a regional co-operative federation in Pune that conducts management training for local credit societies. The federation charges each participant a training fee of Rs 2,000 to cover hall rentals and study materials. Following the reasoning in this ruling, the federation cannot claim exemption simply because it is a non-profit entity fulfilling statutory duties. It must add 18% GST to the training fees charged to member societies.
What you should do
If your organization charges fees for training member entities, evaluate whether your income comes from member fees or direct government grants. Remember that an advance ruling binds only the specific business that asked and its local tax office. Other organizations facing similar doubts should consult a tax professional or apply for a separate advance ruling before changing their GST practices.
If you do nothing
Assuming that non-profit or statutory training programs are automatically exempt from GST can lead to significant unpaid tax liabilities. If a tax officer audits your organization and determines GST was payable, you will be required to pay the uncollected 18% tax along with mandatory interest and penalties. Because you cannot recover past tax from course participants after the event, these costs will have to be paid entirely out of your organization's funds.
The terms explained
- advance ruling
- A written decision given by tax authorities to a specific business explaining how GST laws apply to its particular situation.
- supply
- Any provision of goods or services made for a fee or payment in the course of business operations.
- commercial training and coaching services
- Training or instruction provided by any institute or body for a fee, which does not grant a degree officially recognized by law.
The ruling in detail
Authority for Advance Ruling
THE MAHARASHTRA RAJYA SAHAKRI SANG MARYADIT
NO.GST-ARA- 11/2018-19/B- 70 dated 18/07/2018 · Maharashtra
Questions before the authority
- The Maharashtra Rajya Sahakari Sangh Ltd. conducts education and training programmers through its 13 co-operative training centres and 33 district co-operative boards by charging fees to participants. Maharashtra Rajya Sahakari Sangh Ltd. is not profit making body and doing this activity as statutory requirement of Maharashtra Co-operative Societies Act,1960. Therefore, it is requested to exempt GST to Maharashtra Rajya Sahakari Sangh Ltd.
Facts
The applicant is a state-level apex training institute registered under the Maharashtra Co-operative Societies Act, 1960. It provides education and training to members, officers, and employees of co-operative societies through 13 training centres and 33 district co-operative boards. It collects fees and annual subscription funds from participant societies to cover its expenses. The applicant claimed GST exemption on the grounds that it is a non-profit body performing a statutory duty mandated under state legislation.
Ruling
| Question | What the authority ruled |
|---|---|
| GST exemption for co-operative education and training programs provided against fees | No exemption; liable to GST at applicable rates Classified under Commercial Training and Coaching services (SAC 999293) taxable at 18% GST. |
The Authority held that the educational and training services provided by the applicant to members of co-operative societies for a fee are **covered within the scope of supply**. The applicant is not directly funded by the Government nor does it qualify as an educational institution serving its own students or faculty under exemption notifications. Therefore, the activity is **liable to GST at applicable rates**.
Reasoning
The Authority observed that the applicant collects fees and annual membership contributions from participant societies rather than receiving direct government funding or grants. Exemption under Notification No. 12/2017-Central Tax (Rate) (Sr. No. 66(a)) is applicable only to services provided by an educational institution to its own students, faculty, and staff, which is not the case here. Under Section 2(84), Section 2(17)(e), and Section 7(1) of the CGST Act, 2017, the provision of facilities or benefits to members by an association for consideration constitutes a supply in the course or furtherance of business. Consequently, the activity is taxable under Section 9(1) as Commercial Training and Coaching Services (SAC 999293) attracting 18% GST.
Provisions relied on
- Section 2(17)(e) of the CGST Act, 2017
- Section 2(31) of the CGST Act, 2017
- Section 2(84) of the CGST Act, 2017
- Section 7(1) of the CGST Act, 2017
- Section 9(1) of the CGST Act, 2017
- Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017
- Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (Sr. No. 66(a))
- Notification No. 9/2017-Integrated Tax (Rate) dated 28.06.2017
- Section 24A of the Maharashtra Co-operative Societies Act, 1960
- Section 68 of the Maharashtra Co-operative Societies Act, 1960
For the practitioner
This ruling establishes that statutory apex bodies charging fees or annual contributions from member entities for training services **cannot claim GST exemption** merely by virtue of being non-profit or performing a statutory mandate. It clarifies that mandatory legislative obligations on member societies to contribute do not equate to direct government funding or grants for exemption purposes.
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/maha-gst-ara-11-b-70_dt.18.07.18_mrssl.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
About Patron Accounting LLP
Patron Accounting LLP is a CA and CS-led accounting and compliance firm that has been working with businesses across India since 2019. We handle the work that keeps a company correct with every department it answers to: day-to-day bookkeeping and accounting, GST registration and returns, income tax filing and assessments, TDS, payroll and PF/ESI, company and LLP incorporation, ROC and MCA compliance, statutory and internal audit, physical stock and inventory audits, trademark and other registrations, and the certificates and reports that banks, buyers and regulators ask for.
Our clients range from a first proprietorship registering for GST to established companies running operations across several states. Much of our work is exactly this: reading what a department has published and telling a business, in plain terms, whether it changes anything for them.
We operate from five offices and serve clients across the rest of India remotely:
- Pune (HQ): RTC Silver, B4-708, Sai Satyam Park, Wagholi, Pune, Maharashtra 412207
- Mumbai: 104, Rajshila Building, 597 J.S.S. Road, Marine Lines, Mumbai 400002
- Delhi: 3rd Floor, B-6/154-155, Sector 5, Rohini, Delhi 110085
- Gurugram: Pioneer Urban Square, B109, Golf Course Ext Road, Sector 62, Gurugram 122098
- Ahmedabad: Phoenix Tower, 1107, near Commerce Six Road, Drive In Road, Navrangpura, Ahmedabad, Gujarat 380009
If anything on this page affects you and you would like somebody to look at your own position, we are glad to help. Call +91 94594 56700, write to sales@patronaccounting.com, or visit patronaccounting.com. The first conversation costs nothing.