GST applies on membership fees, Rotary Club of Mumbai told

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Yet another club affiliated to Rotary International, has obtained an unfavourable ruling from the GST-Authority for Advance Rulings (Maharashtra), which has held that fees collected by it from its members will be subject to goods and services tax. Rotary International is a global organisation, which brings together members to provide humanitarian service and advance the concept of peace around the world. It has over a million members worldwide and more than 35,000 clubs which work for promoting peace, fighting diseases, providing sanitation, supporting education, etc. ‘Rotary Club of Mumbai – Western Elite’, which was the applicant in this case, pooled the amounts collected from its members (such as annual membership fees and entrance fees from new members) in a single bank account for paying expenses relating to meetings, communication expenses, per capita dues to Rotary International, and subscription to the Rotary magazine.

The club pointed out that there was no profit motive, surplus if any was used for charitable activities. These funds were not used to provide members any facilities such as those related to sports, fitness, lifestyle, entertainment, or even personal transportation. It further explained that participating members contributed separately to activities such as training programs, workshops or cultural programs, on which GST was paid if it exceeded the exemption thresholds under the GST Act. However, The Authority for Advance Rulings (AAR) bench, did not deviate from its earlier decision, taken in similar cases of Rotary Club of Queens Necklace and Rotary Club of Nariman Point. It held that the amount collected as membership subscription and admission fee from members is liable to GST as supply of services.

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