Contributions from members, recovered for spending on weekly meetings, other petty administrative expenses amounts to supply

Last updated: 16 December 2021

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The Maharashtra AAR has ruled that contributions collected from members of a club, which are then used for weekly meetings and administrative expenses, constitute a 'supply' under the CGST Act. This means these contributions are potentially liable for GST. The ruling clarifies that such activities are considered 'business' and the previous principle of mutuality, which suggested no tax was due between a club and its members, is no longer applicable due to amendments in the CGST Act.

Court :
AAR, Maharashtra

Brief :
The Hon'ble AAR, Maharashtra in the matter of M/S. Rotary Club of Mumbai Elegant [Advance Ruling No. GST-ARA-26/020-21/B-108 dated December 9, 2021] held that, contributions from club members, recovered for spending on weekly meetings, other petty administrative expenses amounts to ‘supply' and the activity of collecting contributions and spending towards meeting and administrative expenditures only, is business under Central Goods and Services Tax Act, 2017 ("CGST Act").

Citation :
Advance Ruling No. GST-ARA-26/020-21/B-108 dated December 9, 2021

Daily Limit Reached