The Delhi High Court has held that the activities undertaken by charitable institutions prima facie not covered within ‘supply’ under CGST Act.
The bench of Justice Yashwant Varma and Justice Dharmesh Sharma has observed that a tax under the CGST Act is envisaged to be levied on all inter-state supplies of goods or services or both. This takes us back then to Section 7 which defines the expression “supply” and connects the supply of goods or services to the activities undertaken by a person in the course of or in furtherance of business. The activities undertaken by a charitable institution would, prima facie, not fall within the ambit of activities undertaken in the course of or in furtherance of business.
The petitioner/assessee is a registered charitable institution and has challenged the order holding its income assessable to tax under the GST.
The issue raised was whether the activities undertaken by the charitable institution would fall within the ambit of “supply” under the CGST Act, which is defined to include activities undertaken in the course or furtherance of business.
Section 7 of the CGST Act relates to Scope of supply. It states that the expression “supply” includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.
Section 9 of the CGST Act relates to levy and collection. It states that subject to the provisions of sub- section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both.
The court stated that the matter requires consideration and placed the order in abeyance till the next date of listing.
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Case Details
Case Title: Aroh Foundation Versus Additional Commissioner, Adjudication Directorate General Of GST Intelligence, DGGSTI
Case No.: W.P.(C) 10621/2024 & CM APPL. 43656/2024 (Interim Stay)
Date: 19.11.2024
Counsel For Petitioner: Kamal Sawhney
Counsel For Respondent: Harpreet Singh
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