GST on Membership Fees

In accordance with the Goods and Services Tax (GST) regulations, indirect tax applies to the supply of goods and services in India. The type of GST varies based on whether the supply of goods or services or both is within the state border or interstate.

Similarly, as a membership subscription is a form of supply of service, it attracts GST. GST on membership fees needs to be collected by the membership organisation or membership subscription provider. The concerned membership organisation is further liable to remit the collected GST to the government to contribute to the Indian Government’s tax revenue collection. Learn in detail about the applicable GST rate on membership subscription fees here.

What Is Goods and Service Tax?

Goods and Services Tax (GST), introduced by the Indian Government in 2017, has replaced existing indirect taxes such as value-added tax (VAT), service tax, excise duty and others. The government levies GST on the supply of services or goods based on the type and scope of supply at variable rates.

While intrastate supplies include CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) in equal proportion, interstate supplies include Integrated Goods and Services Tax (IGST). In India, the applicable GST rates are 0%, 5%, 12%, 18% and 28%.

What Are Membership Organisations and Membership Fees?

Membership organisations in India are professional organisations or business entities allowing distinct persons to subscribe to their services or community. It promotes the association of similar-minded people to engage in a shared mission and provision of facilities through activities, industry work and profession.

These organisations charge a membership fee to render their services to subscribers for furtherance of business and collecting maintenance expenses. The membership model focuses on recurring and periodic fee payments (periodical subscriptions).

For instance, annual subscription fee, annual games fee and admission fee with respect to admission of an individual to a membership organisation to allow individuals to participate in valuable consideration.

As per the GST laws in India, a supply of service or supply of activities is subject to GST applicability. In other words, a transaction in connection to the supply of services falls under GST laws.

Usually, the government levies an 18% GST on membership services over and above the subscription fees. Thus, a membership subscription is one of the taxable supplies where the entire membership fee is subject to GST.

The membership organisations are liable to pay the collected GST to the government to contribute to the government's tax revenue generation. Notably, the taxability of membership is a crucial factor that individuals (a taxable person) with membership privilege should consider for payment reference.

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Membership Organisation Services and GST Applicability

Here is the list of GST applicable on membership fees:

Notably, the previous and GST rate applicable remained the same for all the membership organisations.

Conclusion

GST on membership fees is 18% in India for all categories of membership subscription services. The subscribers need to pay the applicable GST at the mentioned rate along with the subscription fees.

However, membership subscription fees do not attract cess if the Sports Director or the Ministry of Youth Affairs and Sports (separate persons) certify that the services are associated (directly or indirectly) with FIFA U-17 Women's World Cup 2020 with no profit motive.

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