Providing legal, medical and financial support to the women survivors of sexual and other violence does not amount to 'Supply of Service' under GST and applicant is not liable to pay GST on the same : Says AAR 

M/S SWAYAM
(AAR, West Bengal)

Facs of case and submission by applicant

The applicant is a charitable trust. It extends legal, medical, psychological and financial support to the women and their children surviving violence and abuse. The applicant also facilitates training programmes and workshops for the survivors. It wants to know whether it is liable to pay tax on its activities.

The applicant submits it facilitates access of the women survivors to legal aids. For example, it accompanies the survivor to the police and the courts and liaise with the lawyers when required. Depending upon the financial circumstances of the survivor, it often provides support in the form of reimbursement of the court fee, lawyers’ fee or medical expenses, including hospitalization or psychiatric counselling. Such financial support is also extended to paying the remuneration of the trainers and charges of the facilitators for trainings and workshops.

The applicant further submits that it does not charge anything on the survivors for the services it extends. The payments discussed above are meted out from donations received and interest on deposits.

Observations and findings of the AAR

The applicant is apparently assisting the women survivors in various ways to get back on their feet. Such survivors of sexual and other violence need services like legal aid, medical assistance, and vocational training. The recipient of such services is, therefore, not the applicant but the survivor woman. The applicant makes payments not to the supplier of the services, but as financial support in the form of reimbursement to the recipient survivor. It is, therefore, not liable to pay GST based on reverse charge mechanism on such payments.

The applicant does not charge any consideration for facilitating the legal aid and other assistance. Such activities of the applicant, therefore, does not result in ‘supply’ of service as defined under section 7 (1) of the GST Act. The applicant is not, therefore, liable to pay tax thereon.

The applicant’s activities do not amount to ‘supply’ of service, neither is it a recipient of the services for which it often provides financial assistance to the women survivors of sexual and other violence. The applicant is, therefore, not liable to pay GST on the activities described in the application.

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