As of July 1, 2017, the Goods and Services Tax (GST) has been implemented across India. Charitable trusts and non-governmental organizations (NGOs) have been affected by the new tax regime. In this article, we will discuss the impact of GST on NGOs and charitable trusts in India.
GST is a comprehensive tax that has replaced many indirect taxes in India. The GST is a destination-based tax, which means that it is levied at the point of consumption rather than the point of origin. In other words, it is a single indirect tax for the whole nation, which will make India a unified market.
NGOs are entitled to exemptions under GST if they meet certain criteria. NGOs that are registered under the Societies Registration Act, the Bombay Public Trusts Act, or the Charitable Trust Act are eligible for exemption from GST. NGOs that have an annual turnover of less than Rs. 20 lakhs (Rs. 10 lakhs for the northeastern states) are also exempt from GST.
However, NGOs that are engaged in commercial activities or have an annual turnover of more than Rs. 20 lakhs (Rs. 10 lakhs for the northeastern states) are required to register for GST. This can be a challenge for NGOs that are already struggling to raise funds and carry out their charitable activities.
Charitable trusts are also eligible for exemptions under GST if they meet certain criteria. Charitable trusts that are registered under the Societies Registration Act, the Bombay Public Trusts Act, or the Charitable Trust Act are eligible for exemption from GST.
However, charitable trusts that are engaged in commercial activities or have an annual turnover of more than Rs. 20 lakhs (Rs. 10 lakhs for the northeastern states) are required to register for GST. This can be a challenge for charitable trusts that are already struggling to raise funds and carry out their charitable activities.
A. Yes, donations to NGOs and charitable trusts are exempt from GST.
A. Services provided by NGOs and charitable trusts are exempt from GST if they are related to their charitable activities.
A. Yes, NGOs and charitable trusts that are required to register for GST are also required to file returns under GST.
A. No, subsidies and grants received by NGOs and charitable trusts are exempt from GST.
A. Goods purchased by NGOs and charitable trusts for their charitable activities are exempt from GST.
In conclusion, the implementation of GST has had an impact on NGOs and charitable trusts in India. While exemptions are available under GST, NGOs and charitable trusts that are engaged in commercial activities or have an annual turnover of more than Rs. 20 lakhs (Rs. 10 lakhs for the northeastern states) are required to register for GST. This can be a challenge for organizations that are already struggling to raise funds and carry out their charitable activities.
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