In a recent ruling, the Ahmedabad Bench of Authority for Advance Ruling (AAR) has ruled that 12% Goods and Services Tax (GST) is applicable on accommodation buildings located outside the boundary of religious places.
The applicant, Nandini Ashram Trust is a registered trust under the Bombay Charitable Trust Act. They possess a l2AA certificate from the Income Tax Authorities. According to the conditions of the trust agreement, the petitioner offers lodging to travellers who come to the Ambaji Temple. The applicant further claims that their daily room fee is Rs. 1000.
The bench observed that the applicant trust which they were renting to pilgrims is located in the precincts of the Ambaji Temple and a representative of the applicant informed that the building was outside the boundary limits of the trust.
Going by the definition of precinct, it is emphatically clear that the applicant is not eligible for the benefit of the notification which exempted services provided by an entity registered under section l2AA of the Income Tax Act, 1961, by way of charitable activities.
The applicant relied on the ground that they qualify for an exemption, but the bench noted that this was irrelevant to the case given the authorities’ assertion during the personal hearing that Nandini Ashram was not owned by Shri Arasuri Ambaji Mata Devasthan Trust, the Ambaji Temple Trust.
The authority bench of Milind Kavatkar and Amit Kumar Mishra observed that as per Section 22 of the Central Goods and Services Tax Act, 2017, every supplier shall be liable to be registered from where he makes a taxable supply of goods or services or both, if its aggregate turnover in a financial year exceeds twenty lakh rupees.
The authority further determined that the petitioner was obligated to register for the Goods and Services Tax (GST) and that 12% GST is payable on the room of the Nandini Ashram, which they were renting to pilgrims inside the Ambaji Temple grounds but beyond the boundaries of the temple.
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