The implementation of GST has been hailed as a major tax reform that will unite the whole country in terms of taxation. While this has benefited a variety of industries, the adoption of the GST also had effects on charities and non-profit organizations. These entities are not completely free from the GST, although they do have a few unique exemptions. Thus, In this article, we will understand the GST Registration for NGOs. We will also understand the documents required for GST Registration for NGO.
What is an NGO?
A non-governmental organization (NGO) is a non-profit organization that operates outside the government. NGOs, sometimes known as civil societies, are non-governmental organizations (NGOs) that are formed on a local, nationwide, and worldwide level to promote a social or political aim such as humanitarian issues or the climate.
What qualifies as a charity activity for the purposes of the GST?
The Goods and Services Act also establishes the requirements for a charitable activity to be labeled as such. They are as follows:
Services in the field of public well being, such as:
- Counseling for terminally sick people or Helping physically handicapped people
- Providing Help to people living with HIV or AIDS A support group for people who are addicted to alcohol.
- Encouragement religion, spirituality, or yoga
- Public education on health and family planning
- Promoting educational or skill development programs for those who have been physically or mentally disturbed
- Helping Prisoners
- Helping Children who are orphaned, unemployed, or abandoned
- Environmental protection, including watersheds, forests, and animals.
In simple words, A charity trust or non-profit organization must meet two conditions to be excluded from GST:
- Under Section 12AA of the Income Tax Act, the entity must have NGO Registration.
- The entity’s services must be for the benefit of others.
If a charitable trust or non-profit organization fails to fulfill the above two of the conditions, GST will apply, and the entity will be required to have GST Registration and do GST Return Filing.
Is GST excluded for services supplied by Charitable Trust?
No, only charity activities as stated above that are offered by a charitable trust or a non-profit organization with a 12AA registration are free from GST. Any other service supplied by a Trust in exchange is subject to GST and NGO needs to have GST Registration and do GST Return Filing.
Is GST exempt on items sold by Charitable Trust?
Yes, products sold by a charity trust are subject to GST. As a result, charity trusts are not excluded from providing commodities to benefit others.
List of Documents Required for GST Registration for NGO
If you are NGO and applying for GST Registration, you must have the following documents –
- Pan Card of society/Trust/NGO
- Certificate of NGO
- Passport size Photographs and PAN Card of Promoter/ Partners
- PAN card and Aadhaar card of the authorized signatory.
- Board Resolution or any other proof of appointing authorized signatory
- Registered Office Address proof
- Bank account details
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