Donations received by charitable institutions from individual donors, without quid pro quo is discussed in Circular No. 116/35/2019 GST dated 11.10.2019.
The summary of the treatment of Donation in GST is discussed hereunder.
Donations received by the charitable organizations are treated as consideration only if there exists, quid pro quo, i.e., there is an obligation on part of recipient of the donation or gift to do anything.
When the name of the donor is displayed in recipient institution’s premises, in such a manner, which can be said to be an expression of gratitude and public recognition of donor’s act of philanthropy and is not aimed at giving publicity to the donor in such manner that it would be an advertising or promotion of his business, then it can be said that there is no supply of service for a consideration.
Therefore, there is no GST liability on such consideration.
Example of case where there would be no taxable supply
“Good wishes from Shri Dinesh” printed underneath a digital blackboard donated by Mr. Dinesh to a charitable Yoga institution”.
