TaxTMI 
TaxTMI 
2026 (5) TMI 1079
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....er the application on merits, dehors the closure order relied upon earlier, observing inter alia that the earlier proceedings were closed upon payment without any adjudication on merits and hence could not be treated as a bar under Section 98(2). Accordingly, the present application is examined and decided on merits, subject to and in accordance with Section 98(2) of the CGST Act. 4. Further, as the questions raised in the application required certain clarifications and supporting particulars, additional details were sought from the applicant. In response, the applicant furnished the requisite information and documents vide e-mail dated 26.02.2026, including copies of tender notifications and guidelines, sample receipts, and copies of agreements executed with the contractors, which have been taken on record and duly considered in the present proceedings. 5. Background of the Applicant: 5.1. TRAVANCORE DEVASWOM BOARD ("the Applicant") is a statutory autonomous body constituted under the Travancore Cochin Hindu Religious Institutions Act, 1950 for the administration and management of temples of the erstwhile State of Travancore. The Board administers more than 1,250 temples ....
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....ugh auction on a lump-sum basis. 6.3. Devotees leaving clothes in the Pamba River obstruct ritual bathing and affect river hygiene. To regulate collection and prevent indiscriminate retrieval, the Applicant assigns the right to collect such abandoned clothes through auction or tender. 6.4. The Applicant owns agricultural produce such as coconuts from temple properties. As routine auctions are impracticable, an estimated annual value is fixed and the right to collect such produce is assigned through auction, subject to the auction value not being below the estimated value. 6.5. The Applicant is a statutory religious body constituted under the Travancore Cochin Hindu Religious Institutions Act, 1950 and does not have corporate status. Payments made towards honorarium, sitting fees, advocate fees, and legal expenses arise from statutory and temple administration functions. 6.6. The Applicant makes payments towards advocate fees and legal expenses, incurred in connection with statutory and temple administration matters. 6.7. The Applicant facilitates sacred rituals such as Pulluvanpattu and Balithara. The right to perform such rituals within temple premises is periodical....
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....a mode of valuation and does not attract GST. 7.5. The Applicant, being constituted under the Travancore Cochin Hindu Religious Institutions Act, 1950, does not possess the status of a body corporate. Accordingly, payments made by the Applicant towards honorarium, sitting fees, or similar payments to the President and Members of the Board, arising from statutory functions, do not attract GST under the reverse charge mechanism. 7.6. For the same reasons, the Applicant submits that payments made towards advocate fees and legal expenses, incurred in connection with statutory and temple administration matters, are not liable to GST under the reverse charge mechanism, as the Applicant is not a body corporate within the meaning of the relevant GST provisions. 7.7. The Applicant submits that rituals such as Pulluvanpattu and Balithara are integral religious ceremonies conducted within temple premises. The assignment of the right to perform such rituals to qualified priests or Acharyans is intrinsically connected with religious practice. Monetary offerings made by devotees during such rituals are voluntary religious contributions. Hence, the consideration, if any, relating to such....
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.... items within temple premises, as detailed in the facts of the issue (Para 4) are auctioned to various bidders. 9.3. In the course of carrying out the aforesaid activities, the Applicant receives consideration in various forms, including weight-based/quantity-based amounts, lump-sum auction amounts, and periodic payments arising from assignment of rights for specified periods. 9.4. Firstly, before examining the taxability of the individual activities undertaken by the Applicant, it is necessary to determine whether the Applicant qualifies as a person engaged in business and whether the impugned activities fall within the scope of "supply" under the CGST Act, 2017. 9.4.1. Section 2(108) of the CGST Act, 2017 defines "taxable supply" as a supply of goods or services or both which is leviable to tax. Section 7(1) of the CGST Act, 2017 provides that "supply" includes all forms of supply of goods or services or both, such as sale, transfer, licence, lease or disposal, made for a consideration in the course or furtherance of business. Section 2(17) of the CGST Act 2017 defines "business" in an inclusive and expansive manner, covering all activities undertaken f....
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....licant is constituted under the Travancore-Cochin Hindu Religious Institutions Act, 1950. Section 4(2) of the said Act expressly constitutes the Travancore Devaswom Board as a body corporate having perpetual succession and a common seal. 9.4.3. Now, applying the above provisions, it is observed that the Applicant undertakes organised and recurring activities such as auctioning and tendering of rights and privileges for consideration through 'competitive tender or auction processes. Such activities are revenue-generating and commercial in character. The adoption of a competitive bidding mechanism is aimed at securing maximum consideration for the grant of such rights for the applicant. The contractor participates in such bidding with the expectation of commercial gain and is authorised, in terms of the agreement, to carry out the activity and recover charges or derive economic benefit therefrom. The religious context in which these arrangements arise does not alter the essential legal character of the transactions, which are contractual grants of rights for consideration. 9.4.4. From the above, it is evident that although the Applicant is a statutory religious board, it is....
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....ight or licence to the contractor for consideration, acts as the supplier of services, and the successful bidder/contractor, being the person liable to pay the agreed consideration for such grant, is the recipient of the said service. The consideration flows from the contractor to the applicant in return for the conferment of the exclusive right. Accordingly, the applicant is the provider of a service by way of grant of licence or right, and the contractor is the recipient of such service within the meaning of the CGST Act, 2017. 9.4.7. Having determined the essential nature of the Applicant's outward supply, the Authority shall now examine each activity individually for the purpose of determining its taxability under the relevant provisions of the CGST Act, 2017 and the applicable exemption notifications. 9.5. Auction of Rights to Collect Rice and Coconuts Offered by Devotees 9.5.1. The applicant assigns, through a process of competitive auction or tender, the exclusive right to collect remnants of offerings such as rice and coconuts for consideration, with the objective of discovering the maximum price. The Applicant has contended that rice and coconuts are exempt or....
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....ights for consideration constitutes a commercial activity, notwithstanding the religious origin of the offerings. 2. Similarly, in the Sri Malai Mahadeshwara Swamy Kshethra Development Authority, the Authority for Advance Ruling, Karnataka, held that auctioning of rights for collection of vehicle entry fees, performance of tonsuring services, and collection of service charges for vahana pooja amounts to a transfer of the right to provide services for consideration. It was further held that the applicant authority was not itself providing the underlying services but was assigning exclusive rights to third parties through auction, and such transactions constituted taxable supplies under the GST law. 9.6. Auction of Rights to Collect Abandoned Clothes 9.6.1. On the issue of auctioning of the right to collect clothes abandoned by pilgrims, the Authority observes that the Applicant does not merely engage a cleaning or sanitation service as an administrative activity. Rather, the applicant assigns, through a tender/auction process, the exclusive right to collect such abandoned garments to a third party for a lump-sum consideration. The Applicant has submitted that devotees....
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..... The Applicant therefore provides a licensing service to the contractor, who is the recipient of such service. Accordingly, the auctioning of rights to collect abandoned clothes constitutes a taxable supply of services under the GST law. 9.7. Auction of Rights to Harvest Coconuts from Temple Lands In respect of coconuts harvested directly from coconut palms situated on temple properties, the Applicant assigns the right to collect and manage standing crops through auction. The activity is limited to disposal of agricultural yield from temple lands. The Authority notes that coconuts on the tree constitute agricultural produce in its primary form. The service of granting the right to collect and manage such produce is directly related to agricultural operations, including harvesting. Entry No. 54 of Notification No. 12/2017-Central Tax (Rate) exempts services relating to cultivation of plants and agricultural operations directly related to production, including harvesting. The said notification is as produced under: SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 54. Heading 9986 Service....
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....ent and Members of the Board are statutory functionaries appointed in accordance with the relevant legislation and do not constitute a "Board of Directors" nor are they appointed as directors under the Companies Act or any analogous corporate law. Merely being members of a board of a body corporate does not ipso facto render them "directors" for the purposes of Notification No. 13/2017-Central Tax (Rate). 9.8.4. Therefore, the services, if any, rendered by the President and Members of the Board do not fall within the category of services supplied by a director as envisaged under the said notification. Consequently, the provisions of Reverse Charge Mechanism are not attracted, and no GST is payable by the Applicant on the honorarium or sitting fees paid to the President and Members of the Board. 9.9. Reverse Charge Liability on Legal Services 9.9.1. Entry No. 2 of Notification No. 13/2017-Central Tax (Rate) mandates reverse charge on legal services provided by an advocate to a business entity. The definition of "business" under Section 2(17) of the CGST Act, 2017 is wide enough to cover the Applicant, in view of its activities involving auctioning of rights and generation o....
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....l amenities such as public toilets and bathrooms within temple premises are managed through an annual tender or auction process. Under this arrangement, the successful bidder pays consideration to the Travancore Devaswom Board for obtaining the exclusive right to manage and maintain such facilities. The contractor thereafter operates the toilets and bathrooms independently and recovers user charges directly from devotees. 9.11.2. It is therefore necessary to determine the true nature of the transaction between the Applicant and the contractor. From the facts on record, it is evident that the Applicant does not by themselves provide toilet or bathroom services to devotees. Instead, it grants to a third party, for a specified period and for a predetermined auction amount an exclusive commercial right or licence to operate and maintain such facilities, with the contractor bearing the operational responsibility and commercial risk and collecting usage charges from the public in its own right. 9.11.3. Entry No. 76 of Notification No. 12/2017-Central Tax (Rate) exempts services "by way of public conveniences such as provision of facilities of bathrooms, washrooms, lavatories, urina....
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....enerating commercial right to a third party. In the present case, the contractor is permitted to operate the facility independently for the agreed consideration, while the Applicant receives the auction amount irrespective of the revenue generated by the contractor. These features indicate that the contractor functions in an independent commercial capacity, subject only to regulatory oversight by the Applicant. 9.11.6. Additionally, upon perusal of the sample tender documents and schedules submitted by the Applicant, it is observed that the Applicant hands over the latrines/toilets/comfort stations owned by the Applicant to the successful bidder through a tender/auction process, wherein the minimum bid amount is fixed at approximately Rs. One crore or more. The terms and conditions of the contract clearly stipulate that the successful bidder/contractor shall be solely responsible for the operation, maintenance, and upkeep of the toilets and washrooms during the entire contract period. It is further provided that the contractor shall procure the necessary cleaning materials at their own cost and shall also be solely responsible for ensuring the availability of water in the latrin....
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....d operate such stalls in the temple forecourts, it conducts a competitive auction, either annually or for a specified period not exceeding one year, whereby the highest bidder is granted the right to operate pooja item stalls within the temple premises for the stipulated duration. The Applicant provides the requisite infrastructure and facilities for the establishment and maintenance of such stalls, the arrangement being incidental and auxiliary to the performance of religious offerings. 9.12.2. The aforesaid arrangement entails the grant, for consideration, of a licence to use space within the temple precincts and, prima facie, constitutes a supply of services by way of licence or renting of immovable property in the course or furtherance of business within the meaning of Section 7(1)(a) read with Section 2(17) of the CGST Act, 2017. However, in terms of Notification No. 12/2017-Central Tax (Rate), Entry 13(b), exemption is provided in respect of services by way of renting of precincts of a religious place meant for the general public, owned or managed by an entity registered as a charitable or religious trust under Section 12AA of the Income-tax Act, 1961, or by an authority c....
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....ees, as stipulated in the proviso thereto. 10. In the light of the facts and legal position as stated above, the following ruling is issued: RULING Question 1-Within the Sabarimala Devaswom, the annual rights to collect offerings' remnants, specifically white rice or mixed rice, is assigned to individuals through a competitive tender or auction process. The rice undergoes periodic weighings throughout the temple season, conducted in the presence of the designated contractor, and its value is determined based on pre quoted rates. Subsequently, once the value of the rice has been remitted to the Devaswom Fund, the rice is disbursed to the appointed contractor. Whether Tax is applicable on such receipts? Ruling-The activity constitutes a supply of services by way of grant of rights or licence to collect and appropriate offerings' remnants for consideration and is a commercial activity undertaken in the course or furtherance of business. The transaction is not a sale of goods and is therefore taxable under Section 7(1) of the CGST Act, 2017. The receipts are liable to GST. Question 2-Within the temples including Sabarimala and Pomba Devaswoms under the administra....