GST ON CHARITABLE TRUST

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A charitable trust selling milk and ghee worth over Rs 40 lakhs annually needs to consider GST registration. While milk sales are exempt, the combined turnover, including ghee sales, may exceed the threshold. If ghee is not classified solely as an exempted 'puja samagri', the trust likely requires GST registration and must charge GST on ghee supplies.

Hemkumar

Hemkumar

(Querist)

10 April 2020 One Charitable trust running Goshala sales milk worth Rs 40 lakhs + Ghee Worth Rs 10 Lakhs during the year , whether it required to get GST Registration number ?? sales of milk and ghee are not business of the trust but as it runs goshala so generation of milk is natural

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

10 April 2020 Sale of milk exempt from GST. Sale of ghee within thrushold so GST registration not required.

CA ANILKUMAR B.COM FCA DISA

CA ANILKUMAR B.COM FCA DISA (Expert)

10 April 2020 The term "business" has got wider meaning. By considering the definition given under the Act, the transactions mentioned in question will treat as business. But, any person engaged exclusively in the business of supply of goods or services wholly exempt from tax are not liable to get registered.

Milk is "exempt supply" , But ghee (Desi ghee) classified as "puja Samagri" is only exempted. If the "Ghee" in question is salable under this head, registration need not be taken. Otherwise, benefit of "exclusively" will lose and will need to get registered under this Act.

CA Suresh Jain

CA Suresh Jain (Expert)

11 April 2020 Since, the aggregate turnover of the trust exceeds Rs. 40 Lakh ( threshold w.e.f. 01.04.2019), the trust has to obtain registration and charge GST on supply of Ghee. The supply of milk and Ghee by trust is covered under the definition of Business

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RAJA P M

RAJA P M (Expert)

11 April 2020 Yes... I agreed to Mr CA Suresh Jain view., As per GST then "AGGREGATE TURN OVER" of trust is exceeds Rs. 40 lakhs. GST registration applicable / required to Trust.

Jayant Bothra

Jayant Bothra (Expert)

11 April 2020 Dear Hemkmar,

You need to obtain the GST registration as you do qualify the definition of 'aggregate turnover' given under section 2(6) of the CGST Act, 2017. As milk is not a 'non-taxable supply' and neither the ghee is thus upon clubbing the two the maximum threshold stands breached. Thus, registration is required in your case.

Further, you may refer to the AAR-Karnataka judgment in the Acharya Shree Mahashraman Chaturmas Pravas Vyavastha Samiti Trust for a better understanding of the concept.

For any further query, you may contact undersigned.

CA. Jayant Bothra
9873-626-020

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