Tree Plantation & Maintenance In Non-Forest Areas By Charitable Trust Exempt From GST: Gujarat AAR
The Gujarat Authority for Advance Ruling (AAR) has granted exemption to tree plantation and maintenance of them by a Trust in non-forest arears like unutilized barren lands, roadsides, amidst lane dividers, on private lands and every other available patch in its reach. In a recent ruling Mr. Vishal Malani (Member- Central Tax) and Ms. Sushma Vora (Member- State Tax) has held that...
The Gujarat Authority for Advance Ruling (AAR) has granted exemption to tree plantation and maintenance of them by a Trust in non-forest arears like unutilized barren lands, roadsides, amidst lane dividers, on private lands and every other available patch in its reach.
In a recent ruling Mr. Vishal Malani (Member- Central Tax) and Ms. Sushma Vora (Member- State Tax) has held that Entry No. 1 of Notification No. 12/2017 was applicable to tree plantation and maintenance by the Applicant as a charitable activity and was exempt from GST.
Applicant, a sister arm of Manav Charitable Trust had been selected under 'Harit Van Path Yojna' initiative of the Gujarat Forest Department, for increasing Tree Cover and provide ecological and environmental protection in 2025-26. The project worth Rs. 113.65 crores entrusted Applicant with planting and maintaining 7,62,712 trees.
Applicant sought advance ruling on whether plantation and maintenance of trees by a Charitable Organisation registered under Sections 12AA/12AB of the Income Tax Act for charitable purposes was exempt from GST.
The Gujarat AAR perused the National Forest Policy and noted that Gujarat's Harit Van Path Yojna was explicitly aimed at environmental protection. As per Policy, one of the strategy for increasing the forest cover was to encourage the planting of trees alongside of roads, railway lines, rivers and streams and canals, and on other unutilized lands under State/Corporate, Institutional or Private Ownership, which will check erosion and desertification as well as improve the microclimate.
Thus, it held that Applicant's activities (planting/maintaining trees in non-forest areas, roadsides, barren lands, etc.) fell squarely within “preservation of environment.”
From the Memorandum of Association submitted by Applicant, the Gujarat AAR inferred that all conditions under Entry 1 of Notification No. 12/2017 – CTR stands fulfilled with
- Applicant's one of the main objectives being clean environment by undertaking tree plantation activities
- Increasing tree cover in the country through massive afforestation and social forestry programmes qualifies as charitable activities \
In this vein, the Gujarat AAR also relied on a 2023 advance ruling in case of Vikas Centre for Development where mangrove plantation was held exempt.
Case Name: Sadbhavna Seva Foundation , Sadbhavna Trust
For Applicant: Mr. Sumit Shingala (Chartered Accountant)