Despite the Karnataka government's assurance regarding GST notices on exempted goods and services, many NGOs and educational institutions are not feeling reassured. These organisations report receiving recent tax demands that appear to disregard their tax-exempt status, leading to fears of continued harassment. Concerns are particularly high for charitable institutions and schools whose core services are meant to be outside the GST net.
While trade and industry bodies welcomed the Karnataka government's assurance that it would not actively pursue GST notices issued over the past 2-3 years on exempted goods and services, the announcement has failed to bring much relief to civil society organisations and educational institutions. Many fear ongoing harassment, citing recent instances of tax demands that appear to ignore GST exemptions.
A major concern voiced by stakeholders is the issuance of GST notices to charitable institution
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FAQ :
The Karnataka government assured that it would not actively pursue GST notices issued over the past 2-3 years concerning exempted goods and services.
NGOs and schools are concerned because they continue to receive GST notices and tax demands that appear to ignore their tax-exempt status, leading to fears of ongoing harassment.
One NGO received a GST notice requesting transaction details for the last three years, despite functioning solely on donations and not engaging in commercial activity. They believe they are end consumers, not suppliers, and pay tax on purchases.
A private school received a GST notice questioning fees for karate and other co-curricular activities, which the school argues are part of the regular academic curriculum and should be GST-exempt.
They are urging state and central authorities to issue clear, binding guidelines to prevent harassment of non-commercial entities and to train tax officers to distinguish between profit-making and service-oriented institutions.