Service tax on non for profit organization

This query is : Resolved

Neha (Querist)
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20 October 2013 My company is registered u/s 25 of companies act. It has three kinds of income:
Donation received from individuals
Donation received from corporates to sponsor a particular cause (Like education for girls in a particular area)
Donation received from corporataes on people liking/tweeting on facebook like 1 re. per click

Please let me know if service tax is applicable on above income.

Also keep in mind that corporate may or may not book this donation as Marketing spend

Please revert

Rajesh Kumar

Rajesh Kumar (Expert)
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22 October 2013 Donations are payment without expecting anything in return. It is a payment without consideration and hence no Service Tax is payable. Such donations are outside the Service Tax net, be it from individual or corporates or government etc. Mere direction like using money for education of girl child or giving accounts regarding use of money to the donor is not a consideration and the nature of donation remains unchanged.
When donations is based on some marketing considerations like naming of event, naming of building, putting up banners at the time of event etc. it is sponsorship. In such situation Service Tax liability is there and corporate or business recipient of service (i.e. donor) is required to pay tax under reverse charge. In other cases like sponsorship by individuals or sponsorship by corporates based outside India, donee is required to pay service tax.
Donations received from corporate based on likes, tweets are not donations- it is payment for doing some activity and Service Tax is payable.