Criteria for a Charitable Trust to be exempted from GST

Specific Criteria allow Charitable Trusts or NGOs to be exempted from the Goods and Services Tax. The Services provided by the Charitable Trusts or NGOs are required to be for Charitable Causes only and both the charitable trusts or NGOs must be registered under Section 12AA of the Income Tax Act.

Charitable Activities under GST:

The Goods and Services Act states the criteria to be called a Charitable activity as follows:

1.  Public health Services, namely:

• Providing Counseling to people affected by HIV or AIDS
• Providing Counselling to alcoholic people
• Providing counselling to Physically disabled or Terminally ill people

2. Promoting the Spirituality, Yoga or Religion by:

• Disseminating the awareness of health, family planning etc. to the public
• Promoting skills development or education programs  in regard to physically or mentally abused people or prisoners or orphaned homeless or abandoned children, or even Residents of rural areas over the age of 65

3. Charitable Services for environmental preservation for watershed areas, forests and wildlife etc.

GST will be applicable to the services and the entity must be registered under the GST if they fail to meet at least two of the criteria. 

Question and Answers:

1.Will the events organized by charitable trusts be exempted from GST?

It will be exempt from GST if trusts run schools, colleges, or other educational institutions specifically for abandoned children, orphans, homeless children, physically or mentally abused persons, prisoners, or those living in rural areas over the age of 65, and such activities will be considered charitable activities. 

2. Will GST be applicable if the Charitable Trust rents out a religious place? 

As per GST law, charitable trusts are exempt from GST, if they rent out religious property to the general public (owned and managed by a registered charitable trust under 12AA of the Income Tax Act, 1961. GST will be exempted when:

• The rooms to be rented out must charge less than RS. 1,000/day
• The charge for a Kalyana mandapam or open area is less than Rs.10,000 per day 

A monthly rent of less than Rs.10,000 is charged for shops and other business spaces

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