The Appellate Authority of Advance Ruling (AAAR) while upholding the ruling of the Authority of Advance Ruling (AAR) ruled that Goods and Service Tax (GST) is applicable to the religious Trust while providing temporary stay for the pilgrims.
The Appellant, Acharya Shree Mahashraman Chaturmas Pravas Vyvastha Samiti Trust is a religious charitable trust registered under Section 12 AA of the Income Tax Act, 1961, and Goods and Service Tax carrying out religious and charitable activities.
The Appellant sought for an advance ruling in respect of the issues, firstly, whether the applicant is liable to pay tax on renting of temporary residential rooms for consideration to the devotees and renting of space for shops and stalls for the purpose of religious programs where the predominant object is not to do business but for the advancement of religion.
Before the authority, the applicant submitted that in view of the relevant CBIC notification, the activity of renting of precincts of a religious place meant for general public owned by an entity registered under specified sections of the Income Tax Act subject to the consideration charged for such renting not exceeding the prescribed ceiling as given above is exempt from tax.
The AAR accepted the above contentions and held that Goods and Service Tax (GST) is applicable on renting 2 BHK units and dormitories including renting of temporary residential rooms for consideration to the devotees and renting of space for shops and stalls; supply of food and beverages at subsidized rates to the devotees; on providing space for a registered person without consideration for the supply of food and beverages to the devotees, only if the applicant and such registered person are covered under the definition of “related persons ” as defined in Explanation to Section 15 of the CGST Act, 2017 and or acting as an intermediary for booking of hotel rooms to the pilgrims from outside.
“In the present case, the place where the applicant is intending to conduct meditation, spiritual activities, and prayers, etc. falls under the expression “religious place” as defined under Notification No. 12/2017 dated 28.06.2017 and renting of residential rooms in such place at a price less than one thousand rupees per day falls under Sl. No.13 of Notification No.12/2017 dated 28.06.2017 and therefore the activity of renting residential rooms under Category-I, Category-ll, and Category-III do not attract tax under the GST Law,” the bench said.
The Appellate Authority of Advance Ruling (AAAR) consisting of the members D.P. Nagendra Kumar and M.S. Srikar while upholding the ruling of the Authority of Advance Ruling (AAR) ruled that Goods and Service Tax (GST) is applicable to the religious Trust while providing temporary stay for the pilgrims.
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