2024 (5) TMI 36 - AAR - GST

Religious Trust entry fees for temple darshan exempt from GST under Section 12AA and Notification 12/2017-CT

The AAR Rajasthan ruled that entry fees collected by a Religious Trust from temple visitors constitute taxable supply under GST as the darshan service is ... Scope of supply - business - consideration - admission to premises - charitable activities - advancement of religion - exemption under Notification No. 12/2017 - Central Tax (Rate)Scope of supply - business - consideration - admission to premises - charitable activities - advancement of religion - exemption under Notification No. 12/2017 - Central Tax (Rate) - Entry fee collected from visitors/devotees/pilgrims by the applicant is taxable under the GST Act or exempt as charitable activity. - HELD THAT: - The Authority examined the statutory definition of 'supply' and the definition of 'business' and noted that admission for a consideration to any premises falls within the scope of supply and business (paragraphs 5 and 6). Applying those provisions, the charge for darshan/visit of the Temple Hall is prima facie a consideration for supply of service. However, Notification No. 12/2017-Central Tax (Rate) exempts services by an entity registered under Section 12AA of the Income Tax Act when such services are by way of charitable activities, which include advancement of religion. The applicant holds provisional registration under Section 12AA for AY 2022-23 to AY 2026-27 and the activities (darshan and imparting religious insight through exhibits) qualify as advancement of religion. Consequently, although the entry fee constitutes consideration for supply, it falls within the exemption and is not taxable under the GST Act (paragraphs 9, 10 and 11). [Paras 5, 6, 9, 10, 11]The entry fee is a consideration for supply but is covered by the exemption for charitable activities relating to advancement of religion and hence is not taxable under the GST Act.Final Conclusion: The Authority rules that the entry fee charged by the religious trust for darshan of the Temple Hall is exempt from GST as a charitable activity relating to advancement of religion under Notification No. 12/2017-Central Tax (Rate). Issues Involved:1. Determination of the liability to pay tax on entry fees collected by a religious trust under the GST Act.Summary:Issue 1: Determination of the liability to pay tax on entry fees collected by a religious trust under the GST ActThe applicant, a religious trust registered u/s 12AA of the Income Tax Act, collects entry fees from visitors for the darshan of Temple Hall. The trust argues that these activities are for the advancement of religion and hence should be exempt from GST as per Entry No. 1 of Notification No. 12/2017, Central Tax (Rate), dated 28th June 2017.The applicant's submission includes that the trust is engaged in activities for the advancement of Jain religion, which includes maintaining the temple and organizing religious ceremonies. The entry fees collected are used for the upkeep of the temple and fulfilling other objectives of the trust.The Authority examined the definition of 'Supply' u/s 7 of the CGST & RGST Act, 2017, and found that the service provided by the applicant is in the course or furtherance of business and thus covered under the scope of Supply. However, services by an entity registered u/s 12AA of the Income Tax Act by way of charitable activities are exempt from GST as per Notification No. 12/2017-CT (Rate) dated 28.06.2017.The Authority concluded that the applicant's activities, which include providing insight into Jain principles and teachings, are for the advancement of religion. Therefore, the entry fees collected are exempt from GST.Ruling: The entry fee collected from visitors/devotees/pilgrims by the applicant is not taxable under the GST Act, 2017, as it is covered under charitable activities relating to the advancement of religion.