News & Notes 730:Notice on GST for all unit executives and trustees

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730 icon.jpg   News & Notes 730
30 December 2017


Notice on GST for all unit executives and trustees


The Central Board of Excise and Customs issued a notification regarding GST on 13th October 2017. Members of the GST Group have been in communication with the auditors regarding this, and its implications for Auroville. They have come to understand that:

  1. For the purposes of GST, the Auroville Foundation (AVF) qualifies as a ‘government entity’ from the date of this notification. Hence, all registered Units and Trusts also qualify as a ‘government entity’.
  2. As per this notification, if one Unit/Trust under the AVF purchases services from another Unit/Trust under the AVF, pays for it out of government grants, and this is so declared in the utilisation certificate, then GST will be at NIL rate.
  3. This applies even in the case of Units/Trusts holding separate GST registrations. This would exempt rental charges, architecture charges, consulting charges, etc. as long as the supplier and recipient of service are both government entities, payment is made from government grants, and the item supplied is a ‘service’. For e.g. a government grant received by SAIIER for construction of a building, architectural service is provided by another unit of AVF, and SAIIER declares it as utilisation of such grant received from the government.
  4. In such transactions, a Bill of Supply (with no GST) needs to be issued, instead of a tax invoice. The registered entity still needs to file monthly GST returns as usual.
  5. This exemption does not apply for the sale of goods, or for services supplied to individual Aurovilians. It also does not apply for services supplied by an Auroville Unit to an outside entity, unless that entity is also a government entity, and payment is made out of government grants.

The FAMC and WCom are in communication with the GST Authorities for obtaining relief under GST for Auroville. Until a written communication is received from the Ministry, all Units and Trusts need to comply with all GST rules and regulations. We recommend that you speak with your auditors for any clarifications on this matter.


Regards,
Your FAMC (Bindu, Chali, Chandresh, Daniel, Lyle, Nicole, Prabhu, Yuval)


P.S.

Definition of ‘Goods’ as per the CGST Act:

“Goods” means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply

Definition of ‘Services’ as per the CGST Act:

“Services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. For a general definition of the term ‘Services’ see [...]