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Trust providing pilgrim accommodation at temple must register for GST and pay 12% tax on services The AAR Gujarat ruled that a registered trust providing accommodation to pilgrims at Ambaji Temple must register for GST and pay 12% tax. The trust could ...
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Trust providing pilgrim accommodation at temple must register for GST and pay 12% tax on services
The AAR Gujarat ruled that a registered trust providing accommodation to pilgrims at Ambaji Temple must register for GST and pay 12% tax. The trust could not claim exemption under charitable activities as it failed to prove all accommodation was for pilgrims. The exemption for renting temple precincts was denied since the ashram was not within temple boundaries and charges exceeded Rs. 1000 per day. The previous exemption for accommodation below Rs. 1000 was withdrawn from July 2022. The trust must register for GST if annual turnover exceeds Rs. 20 lakhs.
Issues Involved: 1. Liability for GST registration. 2. Liability to pay tax under GST registration.
Summary:
Issue 1: Liability for GST Registration
The applicant, a registered trust under the Bombay Charitable Trust Act and holding a 12AA certificate, provides accommodation to pilgrims visiting the Ambaji Temple, charging Rs. 1000/- per day. The applicant sought an advance ruling on whether they are liable for GST registration. The Authority for Advance Ruling (AAR) referred to section 22 of the CGST Act, 2017, which mandates registration for any supplier whose aggregate turnover exceeds twenty lakh rupees in a financial year. The AAR concluded that the applicant is liable for GST registration, subject to the threshold limit of their aggregate turnover exceeding twenty lakh rupees.
Issue 2: Liability to Pay Tax Under GST Registration
The applicant argued that they are exempt from GST based on Notification No. 9/2017-Integrated Tax (Rate) and a tweet stating that Sarais run by religious or charitable trusts are exempt from GST irrespective of rent. However, the AAR found that the applicant's accommodation services do not fall within the definition of "charitable activities" as per Notification No. 12/2017-Central Tax (Rate), which exempts services by entities registered under section 12AA of the Income Tax Act, 1961, by way of charitable activities. The AAR noted that the applicant's accommodation services are not located within the precincts of the Ambaji Temple, and thus, do not qualify for exemption under serial number 13(b) of the notification.
Furthermore, the AAR referred to Notification No. 20/2019-Central Tax (Rate) dated 30.9.2019, which fixed the CGST rate for hotel accommodation with a declared tariff above one thousand rupees per day. The AAR concluded that the applicant is liable to pay GST at the rate of 12% (CGST @ 6% and SGST @ 6%).
RULING
The applicant is liable for GST registration in terms of section 22 of the CGST Act, 2017, subject to the threshold limit of their aggregate turnover exceeding twenty lakh rupees. The applicant is also liable to pay GST at the rate of 12% as per Notification No. 20/2019-Central Tax (Rate) dated 30.9.2019, as amended by Notification No. 3/2022-CT (Rate) dated 13.7.2022, effective from 18.7.2022.
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