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Case Study: Charitable Trust receives Sponsorship from an Individual for conducting event

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Praveen Philip

35 Points Posted on 14 February 2020

Who has to pay tax when a trust receives a sponsorship from individual?

Sponsorship services provided by ANY PERSON to:
i) any body corporate or

ii) partnership firm

RCM will be applicable.

Since trust is not a body corporate RCM will not be applicable and therefore Trust will have to raise invoice for sponsorship amount along with GST.

If charitable trust is not required to be registered as turnover has not exceeded the limit will RCM be applicable and does the individual has to pay.

Replies (1)

Pankaj Rawat

GST Practitioner

29904 Points Posted on 14 February 2020

RCM is applicable on sponsorship only when Supplier is "Any Person" & Receptient is "Body corporate" or "Partnership firm" as you already explained.

so
1. RCM does not Attract.
2. Trust is not liable to Registered if the threshold limit as per section 22 is not exceeds.

Hence in this case , the trust cannot charge & collect GST from Receptient (refer Section 32 CGST) , need to issue Bill of supply.