2021 (12) TMI 519 - AAR - GST

Levy of GST - 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 - renting of temporary residential rooms as per the following categories, to the devotees to stay for the purpose of religious programs where charges per room is less than one thousand per day - renting of space for stalls, where the predominant object is not to do business but for advancement of religion - HELD THAT - The applicant is a religious institution and is temporarily renting residential rooms for consideration and similarly they are also renting space for stalls for consideration. The understanding of the applicant is based on the pronouncement of Hon ble Apex Court of India in the case of Commissioner of sales tax Vs Sai publication fund 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 and dominant activity of the assesse trust in that case was to spread message of Sai baba, then brining out publications and sale thereof by the assesse trust to its devotees at cost price did not amount to business. The (5) member constitutional bench of Hon ble Supreme Court of India in the case of PANKAJAKSHI VERSUS CHANDRIKA 2016 (2) TMI 1063 - SUPREME COURT has held that general things do not derogate from special things. The Apex Court of India in a catena of case law has held that the statute laying down general scheme of operation has to make room for a special statute for which a separate and exclusive field is carved out by the legislature itself. Therefore the special entry 13 will prevail while determining the eligibility for exemption for services supplied by a person registered under Sec 12AA of the Income Tax Act. Thus, a. Renting of rooms where charges from ₹ 1000/- or more per day are taxable. b. Renting of shops for business where charges are ₹ 10,000/- or more per month are taxable.

Summary

Issues:
1. Liability to pay tax on renting of temporary residential rooms and space for stalls for religious purposes.
2. Tax liability on renting rooms based on categories and charges.
3. Tax liability on renting space for stalls for religious purposes.
4. Tax liability on supplying food and beverages at subsidized rates.
5. Tax liability on providing space for registered persons without consideration.
6. Tax liability for acting as an intermediary for booking hotel rooms.

Analysis:
1. The applicant, a religious institution, sought clarification on the taxability of renting rooms and stalls for religious purposes. The Authority discussed relevant case laws, emphasizing that incidental transactions not constituting business activities are considered charitable. However, specific exemptions under Notification 12/2017 apply, making room rentals taxable if charges exceed ?1,000 per day, and stall rentals taxable if charges exceed ?10,000 per month.

2. The Authority ruled that room rentals below ?1,000 per day are not taxable under Entry 13 of Notification 12/2017. The categorization of rooms based on facilities provided does not alter the tax liability if charges remain below the specified threshold.

3. Renting space for stalls for religious programs is taxable only if the monthly rent exceeds ?10,000. The predominant objective being the advancement of religion exempts the applicant from tax liability unless the specified thresholds are breached.

4. The applicant's query regarding supplying food and beverages at subsidized rates was withdrawn as the services were not provided. Hence, the Authority did not provide a ruling on this issue.

5. Similarly, the question concerning providing space for registered persons without consideration for supplying food and beverages was withdrawn as the service was not rendered, leading to no ruling on this matter.

6. The Authority did not rule on the tax liability for acting as an intermediary for booking hotel rooms for pilgrims from outside as the applicant withdrew questions related to this service. Therefore, no specific ruling was provided on this issue.

This detailed analysis of the judgment clarifies the tax implications of renting rooms and stalls for religious activities as per the provisions of the GST Act and relevant notifications.