Is GST Registration Required for Charitable Trust Store?

Under GST law, Section 9 levies tax on intra-state supply of goods or services or both, and the scope of supply is defined in Section 7. Any person or entity involved in such taxable supplies is required to obtain GST Registration as per the provisions of the GST Act.

Section-7 (1) for the purposes of this Act, the expression “supply” includes:

• all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business
• Import of services for a consideration whether or not in the course or furtherance of business
• The activities specified in Schedule I, made or agreed to be made without a consideration
• The activities to be treated as supply of goods or supply of services as referred to in Schedule II

Notwithstanding anything contained in sub-section (1),––

1. Activities or transactions specified in Schedule III;
or,
2. such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council shall be treated neither as a supply of goods nor a supply of services

Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as—

1. A supply of goods and not as a supply of services;
or,
2. A supply of services and not as a supply of goods.

The term ‘business’ is defined in Section 2(17), business is basically:-

1. Any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit
2. Any activity or transaction in connection with or incidental or ancillary to sub-clause (a)
3. Any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction
4. Supply or acquisition of goods including capital goods and services in connection with commencement or closure of business
5. Provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members
6. Admission, for a consideration, of persons to any premises
7. Services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation
8. Services provided by a race club by way of totalisator or a licence to book maker in such club
9. Any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities.

Facts of the Case

The applicant is a Charitable Trust and is running a medical store where medicines are given at a lower rate and the motive of the trust is not profit.

The applicant has submitted that all forms of supply should be in the course or furtherance of business and their trust is a Charitable Trust and a person as per Section- 2(84) (m) of the Act; that therefore, the liability to GST for sale of medicine is required to be examined to ascertain whether the sale of medicines is in the course of furtherance of business or not.