Issues / Concerns:
(a) Exemption to Charitable Organizations: Pursuant to Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017, the Government has exempted services by way of charitable activities, provided by Charitable Organisations from the levy of GST. Thus, charitable organizations engaged exclusively in charitable activities are exempted from obtaining registration. However, charitable organisations are compelled to register where they have receipts on account of ancillary activities like providing a shop on rent to outsider (so that the visitors get tea and food), charitable hospitals running pharmacy and providing medicines at concessional rate or free etc.
(b) Separate Registration for ISD to discharge tax on RCM basis: Under the erstwhile Service Tax laws, an ISD was allowed to discharge tax liability under reverse charge mechanism without seeking a separate registration. However, under GST regime, the ISD is required to obtain a separate GSTIN no. other than the ISD registration for discharging such taxes. This is adding to the multiplicity of registrations and complexity in documentation and compliance and impacting the matrix of ‘ease of doing business ’.
(c) Inclusion of non-operational income for threshold limit: The inclusion of non-operational income like interest income as ‘exempt supplies’ for the purpose of determining the aggregate turnover for registration would bring into the forte a huge number of persons who are otherwise undertaking only a minimal amount of supply. In case a person is earning interest income from Fixed Deposit Receipts (FDR) of Rs. 15 Lakhs and a Rental income from renting of immovable property of Rs. 6 Lakh, he would need to take registration and collect GST on such supply of rental services.