2024 (5) TMI 36 - AAR - GST

Taxable supply or not - entry fee collected from the visitors/ devotees/ pilgrim by the applicant - charitable activity or not - applicant is Religious Trust provisionally registered under Section 12AA of Income Tax Act, 1961 - HELD THAT - The sewa service provided i.e darshan/visit of Temple Hall by the applicant is in the course or furtherance of business. Hence it is covered under the scope of Supply. Since it is covered under the definition of Supply, the amount received by the applicant can be considered as consideration for supply of service. As the service provided by the applicant in question is Supply, it is taxable under GST Act. On perusal of order of provisional registration of the applicant dated 28.05.2021, it is found that they are provisionally registered under Section 12AA of Income Tax Act, 1961 from AY 2022-23 to AY 2026-27 subject to the conditions mentioned therein - the applicant is engaged in service of darshan of Temple Hall and provide insight into principles of Jainism and teachings of the Thirthankar to the visitors, which can be considered as advancement of religion, the benefit of this Notification No. 12/2017-CT (Rate) dated 28.06.2017 in term of Serial No. 1 is available to them and the applicant is not required to pay any Tax under GST Act. The entry fee, being collected by the applicant from the visitors/devotees/pilgrims, is covered under charitable activities relating to advancement of religion which is not taxable under the provisions of GST Act, 2017.

Summary

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.