GST not leviable on subscription/infrastructure development fee collected from members, unless the amended provision is notified

Last updated: 12 May 2021

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Quick Summary

The Karnataka Authority for Advance Rulings (AAR) has ruled that members' clubs, like the Bow-ring Institute, are not liable to pay GST on subscription fees or infrastructure development funds collected from their members. This decision is based on the Supreme Court's ruling in the Calcutta Club case, which upheld the doctrine of mutuality, treating the club and its members as one entity. However, this ruling is contingent on the government not yet notifying the amended Section 7 of the CGST Act, which aims to override the doctrine of mutuality.

Court :
AAR, Karnataka

Brief :
The AAR, Karnataka in the matter of M/s. Bow-ring Institute [Order No. KAR ADRG 27/2021, dated April 22, 2021] held that, the members-club is not liable to pay Goods and Services Tax ("GST") on subscription fees and infrastructure development fund collected from the members, unless the amended Section 7 of Central Goods and Services Tax Act, 2017 ("CGST Act") is notified by the government.

Citation :
Order No. KAR ADRG 27/2021, dated April 22, 2021

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