No GST for adoption fees

The Maharashtra bench of Authority for Advance Rulings (AAR) has recently ruled that fees for adoption of a child which is paid by the couple adopting should not fall under the Goods and Services Tax (GST). The Authority for Advance Rulings pointed out the arguments of a recognized adoption agency that said that children who are adopted are not goods and the adoption agency does not provide any services to the prospective parents thus GST should not be levied on the adoption fees. Currently, Indian couples who are willing to adopt a child have to mandatorily pay a fee of Rs 40,000, whereas those prospective parents living abroad and wishing to adopt from India are charged $5,000. The Government of India has set up the fee structure under the ‘Adoption Regulations’ and this amount is used for the welfare of the children living in child shelter units. The World India Trust, which currently houses 44 kids had submitted an argument before the bench of Authority for Advance Rulings and said that the adoption of a child is not business as per the strict provisions of the Juvenile Justice Act and that children were not goods. Taking note of the arguments raised, the bench of the Authority for Advance Rulings observed and ruled that activities conducted by the adoption centers were charitable and hence should be exempted from GST.