{"id":51461,"date":"2022-12-22T14:47:21","date_gmt":"2022-12-22T09:17:21","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=51461"},"modified":"2022-12-22T14:48:51","modified_gmt":"2022-12-22T09:18:51","slug":"is-it-necessary-to-get-gst-registration-for-section-8-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/is-it-necessary-to-get-gst-registration-for-section-8-company\/","title":{"rendered":"Is It Necessary To Get GST Registration For Section 8 Company?"},"content":{"rendered":"\n<p>The main motive behind\nthe incorporation of Section 8 companies was to promote society&#8217;s non-profit\ngoals, such as trade, commerce, charity, education, sports research, religion,\nsocial welfare and environment protection.&nbsp;\nIn this blog, we will discuss how to get <strong><a class=\"text-primary\" href=\"https:\/\/corpbiz.io\/gst-registration\">GST Registration<\/a><\/strong> for Section 8\nCompany.<\/p>\n\n\n\n<p>Some examples of <em>Section 8<\/em> companies: <\/p>\n\n\n\n<ul><li>Reliance research\ninstitute,<\/li><li>Reliance Foundation,<\/li><li>Federation of Indian\nChambers of Commerce and Industry<\/li><li>A deemed University like\nChrist University,<\/li><li>Over the Counter Exchange\nof India (OCE)<\/li><\/ul>\n\n\n\n<p>GST (Goods and Services\nTax) is an indirect tax levied on the goods and services consumed domestically.\nThis came into force on 1st July 2017. In India, all goods and services are\nsubject to GST unless and until they are exempted from the <strong>GST Council<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/gstcouncil.gov.in\/\"><strong>[1]<\/strong><\/a><\/sup>. Registration of any\nbusiness under GST law&#8217;s ambit helps the entity obtain a unique number from the\nconcerned tax authority. The GST is paid by consumers, but it is paid to the\ngovernment by the businesses selling the products and services.<\/p>\n\n\n\n<p>GST also applies to goods\nand services provided by <em>Section 8<\/em>\ncompanies. This article will navigate your way through GST implications on\nSection 8 companies. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/is-it-necessary-to-get-gst-registration-for-section-8-company\/#What_is_Section_8_of_the_companies_act\" >What is Section 8 of the companies act?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/is-it-necessary-to-get-gst-registration-for-section-8-company\/#Benefits_of_GST_Registration_for_Section_8_Company\" >Benefits of GST Registration for Section 8 Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/is-it-necessary-to-get-gst-registration-for-section-8-company\/#Eligibility_for_Incorporation_of_Section_8_Companies\" >Eligibility for Incorporation of Section 8 Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/is-it-necessary-to-get-gst-registration-for-section-8-company\/#Application_of_GST_Registration_for_Section_8_Company\" >Application of GST Registration for Section 8 Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/is-it-necessary-to-get-gst-registration-for-section-8-company\/#Application_of_RCM_on_non-profits\" >Application of RCM on non-profits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/is-it-necessary-to-get-gst-registration-for-section-8-company\/#Documents_required_for_Obtaining_GST_Registration_for_Section_8_Company\" >Documents required for Obtaining GST Registration for\nSection 8 Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/is-it-necessary-to-get-gst-registration-for-section-8-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Section_8_of_the_companies_act\"><\/span>What is Section 8 of the companies act? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A section 8 company is\nregistered under the Companies Act 2013 and has the following objectives: <\/p>\n\n\n\n<p>Sports, commerce, art,\nscience, education, research, social welfare, religion, charity, environmental\nprotection, or any other such object; and intends to apply its profits, if any,\nor other income in promoting its objective; and intends to prohibit the payment\nof any dividend to its members. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_of_GST_Registration_for_Section_8_Company\"><\/span>Benefits of GST Registration for Section 8 Company <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following are the benefits of GST Registration for\nSection 8 Company:<\/p>\n\n\n\n<ol><li><strong>Exemption to Donors<\/strong>:&nbsp; Any donation received from a Section 8\ncompany is given tax exemption under section 80 G and Section 12 of the Income\nTax Act, 196. <\/li><li><strong>Members have limited\nliability<\/strong>: For the shares subscribed, members of\nthe sec 8 company have limited liability, as they are not liable for the losses\nincurred to the company. <\/li><li><strong>Tax benefits<\/strong>:\nThe Company enjoys all tax benefits available in Section 80 G of the Income Tax\nAct, 196, as CARO (The Company Auditor&#8217;s Report Order) does not apply to <em>Section 8<\/em> companies. <\/li><li><strong>No Minimum Capital<\/strong>:\nAs there is no minimum capital required at the time of incorporation, therefor\nSection 8 companies have the flexibility to alter their capital structure at\nany time as per their requirement.<\/li><li><strong>No requirement of stamp\nduty<\/strong>: Section 8 companies are not required to\npay the stamp duty imposed on MOA (Memorandum of Association). <\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_for_Incorporation_of_Section_8_Companies\"><\/span>Eligibility for Incorporation of Section 8 Companies<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following are the\neligibilities that need to be fulfilled by <em>Section\n8<\/em> companies: <\/p>\n\n\n\n<ul><li>An individual or HUF <\/li><li>Two or more two persons\nwho will act as directors and fulfil all the compliances of the company <\/li><li>At least one of the\ndirectors needs to be a resident of India<\/li><li>The incorporation of the\ncompany needs to be solely for charity, education, sports research, religion,\nsocial welfare and environmental protection<\/li><li>There should be no\ndistribution of the company&#8217;s profits directly or indirectly to its\nshareholders and board of directors.<\/li><li>Founders, boards of\ndirectors, and company members are not permitted to receive remuneration in\ncash or in kind.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Application_of_GST_Registration_for_Section_8_Company\"><\/span>Application of GST Registration for Section 8 Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The act applies to <em>Section 8<\/em> companies in two ways:<\/p>\n\n\n\n<ul><li><strong>As the provider of goods and services<\/strong><\/li><\/ul>\n\n\n\n<p>A trust, society, and <em>Section 8<\/em> companies are included in the\ndefinition of a taxable person under the GST law. Still, an exception to this\nrule is: if these entities engage in economic activities, such as trade and\ncommerce, they will not be considered taxable people under the GST.&nbsp; <\/p>\n\n\n\n<p>However, the Authority of\nAdvance Ruling (AAR) for GST in Maharashtra ruled that goods and services\nprovided by charitable organisations for fee classification will come under the\npreview of GST. <\/p>\n\n\n\n<p>Further, it was also\nstated that all the organisations must register under GST provisions if their\nannual turnover from selling these goods and services is above INR 20 lakhs. <\/p>\n\n\n\n<p>E.g., Any <em>Section 8<\/em> company providing a literacy\ncourse to women must register under GST. <\/p>\n\n\n\n<p>Therefore this ruling\nputs all the doubts to rest regarding the applicability of GST on Section 8\ncompanies.<\/p>\n\n\n\n<p><strong>List\nof Charitable Activities That are Covered under GST Law<\/strong><\/p>\n\n\n\n<ul><li>Educational or skill\ndevelopment programs relating to: <\/li><li>Persons that are above\nthe age of 65 years and residing in rural areas<\/li><li>Prisoners<\/li><li>Persons who are\nphysically or mentally abused<\/li><li>Traumatised persons.<\/li><li>Children who are\nabandoned, orphaned or homeless. <\/li><li>Advancement of religion,\nspirituality and yoga<\/li><li>Preservation of\nenvironment<\/li><li>Public health by: <\/li><li>Providing care and\ncouncil to persons who are afflicted with AIDS OR HIV <\/li><li>Treating terminally ill\npeople or persons suffering from severe mental or physical disabilities. <\/li><li>Providing care or\ncounselling to people addicted to narcotics, drugs, or alcohol.<\/li><li>Spreading public\nawareness regarding family planning or prevention of HIV infection.<\/li><\/ul>\n\n\n\n<ul><li><strong>As the buyer of goods and services<\/strong><\/li><\/ul>\n\n\n\n<p>When we talk about the\nincome earned by the nonprofits, it only gets the tax exemption from the direct\ntaxes, i.e. tax exemption under the income tax law, but no such exemption is\nprovided under the GST law.<\/p>\n\n\n\n<p>E.g., If a non-profit\nis running its business in a commercial office, it cannot claim the exemption\nfrom GST on rent by showing its 12A or 12AA certificates.<\/p>\n\n\n\n<p>Therefore, GST\napplies to non-profits on all the goods they have purchased or the services\nthey have received. <\/p>\n\n\n\n<p>However, there is\nan added point: RCM (Reverse Charge Mechanism) is applicable when purchasing\nany legal service or transporting goods. <\/p>\n\n\n\n<p>(Any person required\nto pay tax under RCM compulsorily must be registered under GST.)<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Application_of_RCM_on_non-profits\"><\/span>Application of RCM on non-profits <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Under the\nfollowing situation, RCM is applied to section 8 company:<\/p>\n\n\n\n<ul><li><strong>Purchase of legal services<\/strong><\/li><\/ul>\n\n\n\n<p>If nonprofit\nwishes to engage an advocate&#8217;s legal services, so for the fee charged by the\nadvocate, the nonprofit must register itself under GST and then pay the GST. <\/p>\n\n\n\n<ul><li><strong>Transport of goods<\/strong><\/li><\/ul>\n\n\n\n<p>RCM also applied\nto the Goods and Transport agencies. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_required_for_Obtaining_GST_Registration_for_Section_8_Company\"><\/span>Documents required for Obtaining GST Registration for\nSection 8 Company <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following\ndocuments are required for GST Registration for Section 8 Company:<\/p>\n\n\n\n<ul><li>Date of formation of the\ncompany<\/li><li>Pan Card of\nsociety\/Trust\/NGO<\/li><li>Passport size Photographs\nand PAN Card of Promoter\/ Partners<\/li><li>Contact Information (it\nincludes: mailing address, website address and telephone number) <\/li><li>Business registration\nnumber(BRN) of the company <\/li><li>Identification number\n(INN) of the company<\/li><li>Types of business\nactivity carried out by the company<\/li><li>Purpose and objectives of\nthe company <\/li><li>Annual turnover of the company<\/li><li>Types of business\nactivities carried out by the company in the past years <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>This article explains all GST (Goods and Services Tax) provisions that apply to Section 8 companies. Companies incorporated within Section 8 of the Companies Act of 2013 contributed significantly to the betterment of society. Their sole purpose for incorporation is to advance a society&#8217;s non-profit goals, such as trade, commerce, charity, education, sports research, religion, social welfare, and environmental protection. As a result, section 8 companies are included in the GST law&#8217;s definition of a taxable person.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read Our Article<\/b>: <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/guide-on-gst-online-registration-process\/\">GST Online Registration Process: A Complete Guide<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The main motive behind the incorporation of Section 8 companies was to promote society&#8217;s non-profit goals, such as trade, commerce, charity, education, sports research, religion, social welfare and environment protection.&nbsp; In this blog, we will discuss how to get GST Registration for Section 8 Company. Some examples of Section 8 companies: Reliance research institute, Reliance [&hellip;]<\/p>\n","protected":false},"author":48,"featured_media":51462,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16],"tags":[2975],"acf":{"service_id":"334"},"authorName":"Astitva Kumar","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/12\/MicrosoftTeams-image-27.jpg","authorDescription":"Astitva Kumar is an advocate by profession and has completed her BBA. LLB from IP University. She is an avid reader, researcher, and legal writer. Her areas of interest include mediation, conflict resolution, finance, cyber laws, and taxation.","postViews":7378,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51461"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/48"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=51461"}],"version-history":[{"count":4,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51461\/revisions"}],"predecessor-version":[{"id":51466,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51461\/revisions\/51466"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/51462"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=51461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=51461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=51461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}