Facts of the Case:

In this case, the applicant (M/s Sadbhavna Seva Foundation) a Section 8 company incorporated under the Companies Act, 2013, is a non-profit charitable institution registered under Section 12AB of the Income-tax Act, 1961. The applicant is engaged in various charitable activities, including preservation of environment, primarily through large-scale plantation and maintenance of trees. 

The scope of activities includes avenue plantation, digging pits, planting saplings, watering, fertilizing, pest control, replacement of dead plants, maintenance over multiple years, and other incidental and ancillary activities necessary to ensure survival and growth of trees. These activities are carried out in non-forest areas such as road sides, vacant lands, dividers, private lands, and other available patches.

The applicant is involved in projects under Government initiatives such as the “Harit Van Path Yojna” of the Government of Gujarat, implemented on a PPP basis, aimed at increasing tree cover and environmental preservation. Under such schemes, the applicant (and its sister charitable institutions) undertakes plantation and multi-year maintenance of trees for consideration paid by the Government.

The applicant sought an Advance Ruling on whether such plantation and maintenance activities qualify as “charitable activities” and are therefore exempt from GST under Entry No. 1 of Notification No. 12/2017-Central Tax (Rate).

Issue:

The applicant sought an Advance Ruling on whether such plantation and maintenance activities qualify as “charitable activities” and are therefore exempt from GST under Entry No. 1 of Notification No. 12/2017-Central Tax (Rate).

Held that:

The AAR held as under-

• The applicant is validly registered under Section 12AB of the Income-tax Act, 1961, thereby satisfying the first statutory condition prescribed under Entry No. 1 of Notification No. 12/2017-CT (Rate).
• The definition of “charitable activities” under Clause 2(r) of Notification No. 12/2017 expressly includes “preservation of environment including watershed, forests and wildlife.” Plantation and maintenance of trees, particularly in non-forest areas such as road sides, barren lands, and urban spaces, are integral to environmental preservation, align with the objectives of the National Forest Policy, 1988, and contribute to ecological balance, prevention of erosion, improvement of micro-climate, and enhancement of tree cover.
• Government schemes like Harit Van Path Yojna are specifically designed for environmental preservation, and activities undertaken thereunder cannot be treated as commercial or business-oriented merely because consideration is received. The Authority relied on its earlier ruling in Vikas Centre for Development (AAR Gujarat), where similar plantation and maintenance activities (mangroves) were held to be exempt under the same notification.
• Accordingly, the activities of plantation and post-plantation maintenance of trees, including incidental and ancillary works necessary for survival of trees, squarely fall within the ambit of charitable activities under Entry No. 1 of Notification No. 12/2017-CT (Rate).

The AAR ruled that GST exemption is available to the applicant under Entry No. 1 of Notification No. 12/2017-CT (Rate) for plantation and maintenance of trees undertaken as part of environmental preservation. The applicant is not liable to pay GST on such charitable activities.

Case Name: In Re: M/s. Sadbhavna Seva Foundation, Sadbhavna Seva Trust dated 23.12.2025

To read the complete judgement 2025 Taxo.online 3444