Renting of Precincts of a Religious Place

[Aliasgar Tambawala]

1. Querist is a “Public Religious Trust” registered with the Charity Commissioner, Maharashtra State under the provisions of The Bombay Public Trusts Act, 1950 and is also registered with the Income Tax Authorities u/s 12A of the Income Tax Act, 1961.

1. The querist was formed prior to 1961.
2. The Querist owns a building on the ground floor, 1^st Floor and 2^nd Floor of which is a masjid premises.

1. The Querist has let out its terrace premises of the above-mentioned building to Cell Tower operators on Leave and License basis for installation of temporary shelter / shed for placement of antennae and other equipments of Cellular Mobile Telecommunication System.

Queries :-

1. As per clause 5 (a) of Exemption Notification No.25/2012-ST dated 20.06.12, services by a person by way of Renting of precincts of a Religious Place meant for general public is exempt.

In this case if the Querist is earning License Fees by allowing Cell Tower Company to install their Shelter Cabinet on the terrace premises of Masjid premises (being owned by the Querist), will the same be exempt from Service Tax applicability being Renting of precincts of a Religious Place meant for general public?

[Mahir S]

Sir,

As per your query you are using the building premises for commercial services and not for religious purpose used by general public, hence this exemption is not available,

However exemption from service tax is available if such rent income is less than ₹ 10 lacs p.a.

[Aliasgar Tambawala]

Dear Mr. Naveed,

Thanks for your reply. However,

As per clause 5(a) of Exemption Notification No.25/2012-ST dated 20.06.12 - “Renting of precincts of a religious place meant for general public” is exempt. It does not talk about religious or commercial purpose. Else what would be the difference between clause 4 and clause 5(a) of Exemption Notification No.25/2012-ST dated 20.06.12?

 

Refer the under-mentioned judgement:

“Service Tax - 2010 - TMI - 75383 - Tri
Benefit of Exemption Notification No. 14/2003 - Mandap keeper service - Their only contention of revenue is that marriage hall is not within the temple premise, but it is in the temple’s property, for which they relied upon the dictionary meaning of “precinct”. - Commissioner (Appeals) in impugned order has come to a conclusion that marriage hall is within the precincts of the temple. - we find from the photographs that the entire temple complex and marriage hall is enclosed by a boundary wall to indicate that entire property is within the temple premises of the trust - On perusal of Notification No.14/2003, we find that the said notification exempted the taxable services provided by a Mandap keeper for the use of the precincts of a religious place as Mandap, from the service tax leviable there on. In our view, the services provided by the respondent, before us, will clearly get the benefit of Notification No.14/2003, for the simple reason that the marriage hall is within the precincts of a religious place i.e. temple.”

 

The jist of the above judgement talks about “taxable service” provided by a Mandap Keeper, so can it be interpreted to mean that commercial / taxable services rendered from the precincts of a religious place would be covered by the exemption provided by clause 5(a) of Exemption Notification No.25/2012-ST dated 20.06.12?

Kindly provide your valuable comments in light of the above arguement.

[MUKUND THAKKAR]

Sir,

Mr. Naveed is right.

you have chance to presenting your view as and when dept. will issuing any show cause notice. because Tele communication is not nexus with your religious activity.

AI Summary

Renting of precincts of a religious place may be taxable when leased for commercial telecom rather than public religious use. Leasing terrace space of a masjid to telecommunication operators for installation of shelter cabinets and antennae is a commercial use of the premises rather than use for religious purposes open to the general public; accordingly the exemption for renting of precincts of a religious place is not available for such leases in ordinary circumstances, although a limited administrative exemption may apply if rental receipts fall below the statutory de minimis threshold.