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 provided in furtherance of business. However, since the Trust holds provisional registration under Section 12AA of Income Tax Act and engages in advancement of religion through temple services and Jainism teachings, it qualifies for exemption under Notification No. 12/2017-CT (Rate). The entry fees collected for charitable activities relating to religious advancement are therefore not taxable under GST Act 2017.

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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 Act

The 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.

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