# Charitable Activities — Entry 1

## Exemption

Services by an entity registered u/s 12AA or 12AB of the Income-tax Act, 1961, by way of charitable activities.

## What qualifies as 'Charitable Activities'

Activities relating to:

### I. Public health

A. Care or counselling of —

i. terminally ill persons or persons with severe physical/mental disability;

ii. persons afflicted with HIV/AIDS;

iii. persons addicted to dependence-forming substances (narcotics, alcohol); OR

B. Public awareness of preventive health / family planning / prevention of HIV infection.

### II. Advancement of religion, spirituality or yoga

### III. Advancement of educational programmes or skill development relating to —

A. abandoned, orphaned or homeless children;

B. physically/mentally abused and traumatised persons;

C. prisoners; or

D. persons over 65 years residing in a rural area (rural area = village as per revenue records; excludes urban areas).

### IV. Preservation of environment — including watershed, forests & wildlife.

## Activities by 12AA/12AB entities that are NOT 'charitable' (and hence taxable)

Activity	GST treatment
Granting advertising rights / admission to events / functions for fees	Taxable
Hostel accommodation by trusts to students	Not a 'charitable activity' (consider Entry 12 / 14 etc.)
Management of educational institutions to persons in III above	Exempt under Entry 1
Management of educational institutions where trust does NOT qualify as charitable	Not exempt under Entry 1 (may fall under Entry 66)
Yoga / meditation camps primarily for advancing religion/yoga (incl. boarding/lodging incidental)	Exempt
Camps primarily for accommodation/food/drinks	Taxable
Fitness camps — aerobics, dance, music	Taxable
Hospitals run by charitable trusts	Covered separately under Entry 74

## Inward side — services TO charitable trusts

Unless specifically exempted, all goods/services supplied TO charitable entities are liable to GST. Charitable status of the recipient doesn't make inputs exempt.

Worked example

### Example 1

Trust 12AB-registered runs a residential yoga camp at ₹5,000 per participant primarily aimed at advancing yoga (boarding/lodging incidental). → Exempt under Entry 1.

### Example 2

Same trust runs a 'wellness retreat' marketed for luxury stay with morning yoga sessions. Primary purpose = accommodation/food/drinks. → Taxable.

### Example 3

Trust runs a skill-development programme for prisoners → Exempt (Charitable activity III(C)).

### Example 4

Trust rents a hall on its premises for a corporate event at ₹50,000 → Taxable (not a charitable activity).

⚠️ Common exam mistakes

Assuming any 12AA/12AB-registered entity is fully exempt — only 'charitable activities' as defined are exempt.
Treating senior-citizen welfare for URBAN seniors as charitable under III(D) — only rural seniors aged 65+.
Treating fitness/aerobics/dance camps as advancement of yoga — not covered.
Assuming services received BY trusts are also exempt — generally taxable.
Granting advertising rights from charitable platforms — taxable despite the trust being charitable.

Bare-Act text Entry 1, Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 · Notification No. 12/2017-CT(R) · click to expand

Services by an entity registered under section 12AA or 12AB of the Income-tax Act, 1961 by way of charitable activities.

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Charitable Activities by 12AA/12AB Entities [Entry 1, Notif 12/2017-CT(R)]

Worked example

⚠️ Common exam mistakes