TaxTMI 
TaxTMI 
2019 (10) TMI 1136
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....respect of the following question: a) 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 programmers where the predominant object is not to do business but for advancement of religion? b) Whether the applicant is liable to pay tax on renting of temporary residential rooms as per the following categories, to the devotees to stay for the purpose of religious programmers where charges per room is less than one thousand per day, if answer to the question 1 is yes? (i) Category-I: 2 BHK 430 sq.ft., including facilities such as water, electricity, cot, bed, pillow, bedspread, one AC, and having two rooms, hall, kitchen, rest-room + toilet, with cooking facility and no cleaning services. (ii) Category-II: 1 BHK 300 sq.ft., including facilities such as water, electricity, cot, bed, pillow, bedspread, one AC and having one room, hall, kitchen, rest-room + toilet, with cooking facility and no cleaning services. (iii) Category-Ill: Single room, 100 sq.ft., including facilities such as water, electricity, cot, be....
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....nce, etc. which are founded conducted and approved bv ACHARYAs of Terapanth Sect; v. To arrange and conduct holy Chaturmas of saints of the Swethambar Terapanth Jain Sect of Jain Religion; vi. To manage, co-ordinate and co-operate in all possible ways to arrange place of stay, travel and other programmes for Acharyas of Terapanth Sect, and sadhus and Sadhvis initiated in this Sect, Shramans ad Shramanis initiated in Terapanth Sect and Mumukshu ladies and gentlemen and to provide proper arrangement for shravaks and shravikas who come for Seva and Darshan; vii. To arrange for the conduct of maryada Mahotsav of the Holy saints of Terapanth Sect of Jain Religion; viii. To assist graduate students and Researchers in pursuing their studies in presenting the principles of Jain Religion in scientific manner in the present day perspective; to kindle their interest in performing the comparative study with other philosophies; ix. To work towards giving education of fundamental principles of Jain Religion and the Philosophy of Terapanth Sect in Prakrit, Sanskrit, Ardhamagadhi, Hindi, Kannada and various languages; x. To honour those who wor....
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.... from July 2019 to November 2019 at Kumbalagodu Village, Mysore Road, Kengeri Hobli, Bengaluru South Taluk. The main activities that are conducted are Pravachanas, Spiritual Speeches, Dhyana, Meditation, prayer, etc. Public of religions are allowed and no fees will be charged or collected for entry to the public. c. The applicant is intending to provide boarding and lodging facility to the devotees who are staying far away from the place of residence, for which the applicant is erecting temporary residential rooms consisting of the following categories and facilities: i. Category-I: 2 BHK 430 sq.ft., including facilities such as water, electricity, cot, bed, pillow, bedspread, one AC, and having two rooms, hall, kitchen, rest-room + toilet, with cooking facility and no cleaning services. ii. Category-II: 1 BHK 300 sq.ft., including facilities such as water, electricity, cot, bed, pillow, bedspread, one AC and having one room, hall, kitchen, rest-room + toilet, with cooking facility and no cleaning services. iii. Category-III: Single room, 100 sq.ft., including facilities such as water, electricity, cot, bed, pillow, bedspread, common rest rooms a....
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.... (b) Any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) Any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction;" 4.2 On combined reading of the above propositions, the applicant states that they are of the view that the activities conducted by the religious trust for the purposes of advancement of religion, does not fall under the definition of business. Therefore the activities and transactions conducted by the religious trust with the predominant object of advancement of religion does not attract tax under the GST law. 4.3 The applicant states that they place reliance on the decision of the Apex Court in the case of Commissioner of Sales Tax v. Sai Publication Fund [2002] 2 SCC 7 (SC) = 2002 (3) TMI 45 - SUPREME COURT wherein it was held that where the main activity is not business, then any incidental or ancillary transaction, unless established by the revenue department to be an independent business transaction, will also be considered as charitable only and not business. Further, it was also held that, where the main an....
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.... the applicant, i.e. giving pravachanas, spiritual speeches, meditation, Dhyana, prayer, etc., shall definitely fall under advancement of religion. Therefore, the applicant is not liable to pay tax on renting of residential rooms and space for shops and stalls, irrespective of monetary' limit prescribed for exemption 5. Regarding the second question, the applicant submitted that, without prejudice to the submissions made for question no. 1, SI.No. 13 of Notification No. 12/2017 dated 28.06.2017 exempts services supplied by a person by way of: (a) conduct of any religious ceremony (b) renting of precincts of a religious place meant for general public, owned or managed by an entity registered as a charitable or religious trust under section 12AA of the Income Tax Act or a trust or an institution registered under sub-clause (v) of clause (23C) of section 10 of the Income Tax Act or body or an authority covered under clause (23BBA) of section 10 of the said Income Tax Act. Provided that nothing contained in entry (b) of this exemption shall apply to (i) Renting of rooms where charges are one thousand rupees or more per day; (ii) Renting o....
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....hall apply to (i) Renting of rooms where charges are one thousand rupees or more per day; (ii) Renting of premises, community halls, kalyana mandapam or open area, and the like where charges are ten thousand rupees or more per day; (iii) Renting of shops or other spaces for business or commerce where charges are ten thousand rupees or more per month. 6.1 The term "religious place" as defined in clause (zy) of the said notification, means a place which is primarily meant for conduct of prayers or worship pertaining to a meditation or spirituality. 6.2 Reading of the above notification shows that 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. 6.3 In the present case the place where applicant is intending to conduct meditation, spiritual activities and prayers etc., fall under the expression "religious place" as defined under Notification No. 12/2017 dated 28.06.2017 and renting of space for shops and stalls in such place at price....
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....pay the actual amount to the respective hotels. Extra amount if any left out, will be returned to the respective pilgrims. 9.1 The applicant submits further that nothing will be charged having provided intermediary services to the pilgrims. Therefore, the applicant is of the view that having provided such intermediary services without consideration does not attract tax under GST Law. 9.2 In support of the above submissions, the applicant has relied on the following provisions: (a) Sub-section (13) of Section 2 of the IGST Act, defines the term "intermediary" as "a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account". (b) Sub-section (5) of section 2 of the CGST Act / KGST Act defines the term "Agent" as "a person, including a factor, broker, commission agent, arhatia, del-credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both....
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....n for acting as intermediary, and therefore the activity of booking hotel rooms for pilgrims does not attract tax under the GST Acts. 10. Sri Sanjay Dhariwal, Chartered Accountant and duly authorized representative of the applicant appeared and reiterated the submissions made supra. 11. FINDINGS & DISCUSSION: We have considered the submissions made by the applicant in their application for advance ruling as well as the additional submissions made by Sri Sanjay Dhariwal, CA, during the personal hearing. We also considered the issues involved on which advance ruling is sought by the applicant and relevant facts. At the outset, we would like to state that the provisions of both the CGST Act and the KGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the KGST Act. 11.1 The facts and nature of the transactions before us have been examined and we found that the applicant is a charitable trust registered under Section 12-AA of the Income Tax Act. They are engaged in carrying out religious and charitable activities....
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....l activity and not the commercial activity of receipt and supply of goods or services or both, undertaken by a charitable trust. Analogy can be drawn to the activity of giving on rent commercial building owned by a charitable trust. Though the main object of the trust is charitable activity which cannot be covered under the term "business", not all activities of the trust can be kept out of the definition of "supplies". 11.3 The reliance placed by the applicant on the judgement of the Hon'ble Supreme Court in the case of Commissioner of Sales Tax v. Sai Publication Fund [2002] 4 SCC 7 (SC) = 2002 (3) TMI 45 - SUPREME COURT in stating that the transactions are not taxable is misplaced for the following reasons: (a) Sub-section (105) of section 2 of the CGST Act defines the expression "supplier" as under: "(105) "supplier" in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting on behalf of such supplier in relation to the goods or services or both supplied;" This has no condition that to be termed as a supplier, the person must supply the goods or services. ....
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....five hundred rupees per day or equivalent 9 - (viii) Accommodation in hotels, including five star hotels, inns, guest houses, clubs, campsites, or other commercial places meant for residential or lodging purposes having the declared tariff of a unit of accommodation of seven thousand and five hundred rupees and above per unit per day or equivalent 14 - (ix) Accommodation, food and beverage services other than (i), (ii), (iii), (iv), (v), (vi), (vii) and (viii) above 9 - 12.2 The plain reading of the entry 7(ii) of the above Notification reveals that the accommodation provided in commercial places meant for residential or lodging purposes having a declared tariff of a unit of accommodation of Rs. 1000-00 per day per unit or equivalent would be taxable at 6% under CGST Act. The main clauses to be considered is that the accommodation must be provided in a commercial place and such commercial place must be meant for residential or lodging purposes. There is no doubt that the applicant is a supplier of service within the scope of section 7(1) of the CGST Act and they are providing accommodation services to the pilgrims and charging the persons on a monthly bas....
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....ns provided are for temporary stay and not as a residence, the accommodation services provided are not covered under the said entry. Residence involves a degree of permanence which is not present in the service provided by the applicant. 13. Regarding the third question, whether the applicant is liable to pay tax on the renting of space for stalls, it is said in the affirmative for the reasons stated in para 11. 14. Regarding the fourth question, whether the applicant is liable to pay tax on supply of food and beverages at subsidized rates to the devotees, where the predominant object is not to do business but for the advancement of religion, it is to be noted that the applicant is charging consideration for the supply of services. The entry 7 of the Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 makes it very clear that the supply of goods being food or any article for human consumption or drink by way of or part of any service or in any manner whatsoever is taxable. Hence the supply of food and beverages at subsidized rates to the devotees is taxable under the GST Act. 15. Regarding the fifth question, it is seen that the applicant is providing space for ....