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CA Intermediate · Taxation · Exemptions from GST

Sunrise Pathways, a trust registered under section 12AB of the Income-tax Act, runs a free school in Pune. It receives monthly charges from an unrelated registered person for allowing its hall to be used for weddings on weekends. The hall is not a religious place. Which statement is correct on GST for the hall rental?

The hall rental is taxable. GST exemption for trusts applies only to specified charitable activities, not to every supply by a charitable trust. Letting a hall for weddings is a commercial supply, so the supplier's income-tax registration or charitable status does not make it exempt.

  1. AExempt because the supplier is a charitable trust
  2. BExempt because the hall is used for education
  3. CTaxable, as renting of the hall for weddings is not covered by the exemption for charitable activitiesCorrect
  4. DNot a supply, as no profit motive exists

Explanation

Exemption for charitable trusts covers specified charitable activities such as public health, advancing religion, spirituality or yoga, and education to the poor. Renting a hall for weddings is a commercial supply by the trust and is not covered, so GST applies regardless of the trust's registration under income-tax. Option A wrongly treats status alone as sufficient.

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