GST on Services of Membership Organisations

Here we have analysed GST on Services of Membership Organisations in India

Whether GST is leviable on unincorporated Club or Association ?

As per Section 2(84) of CGST Act 2017“person” includes—

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(f) an association of persons or a body of individuals, whether incorporated or not, in India or outside India;

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As per Section 2(17) of CGST Act 2017“business” includes—

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(e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members;

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SCHEDULE II of CGST Act 2017

[See section 7]

ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES

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7. Supply of Goods

The following shall be treated as supply of goods, namely:—

Supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration.

Hence GST will be levied on goods or services supplied by an incorporated / unincorporated  club , associates or association or body of persons to its member .

Is there any GST on Membership of an organizations?

Group 99951 : Services furnished by business, employers and professional organizations Services

999511 : Services furnished by business and employers organisations

999512 : Services furnished by professional organisations

Group 99952 : Services furnished by trade unions

999520 : Services furnished by trade unions

Group 99959 : Services furnished by other membership organisations

999591 :Religious services

999592 :Services furnished by political organizations

999593 :Services furnished by human rights organisations

999594 :Cultural and recreational associations

999595 :Services furnished by environmental advocacy groups

999596 :Services provided by youth associations

999597 :Other civic and social organisations

999598 : Home owners associations

999599 : Services provided by other membership organisations nowhere else classified

What are the GST rates on services by Membership organizations?

GST rates for Services of membership organizations are CGST 9% and SGST 9% / IGST @ 18%

[ As per Sr No 33 of Notification No 11/2017 Central Tax (Rate) Dated 28th June 2017  and Notification No 8/2017 Integrated Tax (Rate) Dated 28th June, 2017 ] 

Is there any exemption from GST to services provided by trade unions/ Membership  Organisations ?

Yes. There is Exemption from GST to following services :

Service by an unincorporated body or a non-profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution –

(a) as a trade union;

(b) for the provision of carrying out any activity which is exempt from the levy of Goods and Service Tax; or

(c) up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex.

[ Entry No 77 of Notification No 12/2017 Central Tax (Rate) Dated 28th June 2017  and Notification No 9/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

Can the Input Tax Credit be taken on Club membership fees ?

As per Section 17(5)(b)(ii) of CGST Act  2017 :-

.. , input tax credit shall not be available in respect of the following, namely:—

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(b) the following supply of goods or services or both:—

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(ii) membership of a club, health and fitness centre

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