CBIC clarifies on levy of GST on the service of display of name or placing of name plates of the individual donor in the premises of charitable organisations

Oct 15, 2019 | by Avantis RegTech Legal Research Team


The Central Board of Indirect Taxes and Customs (CBIC) on October 11, 2019, has given clarification on levy of GST on the service of display of name or placing of name plates of the donor in the premises of charitable organisations receiving donation or gifts from individual donors.

Whereas, CBIC received representations seeking clarification whether GST is applicable on donations or gifts received from individual donors by charitable organisations involved in advancement of religion, spirituality or yoga which is acknowledged by them by placing name plates in the name of the individual donor.

The issue has been examined by CBIC and it is clarified that when the name of the individual donor is displayed in recipient institution premises, in such a manner, which can be said to be an expression of gratitude and public recognition of donor’s act of philanthropy and is not aimed at giving publicity to the donor in such manner that it would be an advertising or promotion of his business, then it can be said that there is no supply of service for a consideration (in the form of donation). There is no obligation on part of recipient of the donation or gift to do anything (supply a service). Therefore, there is no GST liability on such consideration.

Thus, where all the three conditions are satisfied namely the gift or donation is made to a charitable organization, the payment has the character of gift or donation and the purpose is philanthropic (i.e. it leads to no commercial gain) and not advertisement, GST is not leviable.

[Circular No. 116/35/2019-GST]


Bookmark

Related Updates



Alternate Text

Get updates on the go on RuleZbook Mobile App.