RENTING OF PRECINCTS OF RELIGIOUS PLACE MEANT FOR GENERAL PUBLIC
Entry 13(b) of the Notification No.2/2017 Central Tax (Rate) dated 28.06.2017 exempts renting of precincts of a religious place meant for general public owned by an entity registered under section 12AA Income Tax Act provided the consideration charged for such renting does not exceed the prescribed ceiling limits as given in said entry.Thus, this exemption is determined on the basis of amount of consideration charged for such renting.Let us understand the meaning of the terms ‘religious place’ and ‘general public’ referred herein.
Religious place means a place which is primarily meant for conduct of prayers or worship pertaining to a religion, meditation, or spirituality.
General public means the body of people at large sufficiently defined by some common quality of public or impersonal nature.
The word ‘precincts’ is not to be interpreted in a restricted manner and all immovable property of the religious place located within the outer boundary walls of the complex (of buildings and facilities) in which the religious place is located, is to be considered as being located in the precincts of the religious place. The immovable property located in the immediate vicinity and surrounding of the religious place and owned by the religious place or under the same management as the religious place, may be considered as being located in the precincts of the religious place and extended the benefit of above exemption.
Activities other than conduct of religious ceremony and renting of precincts of religious place will be taxable irrespective of the manner or the name in which the consideration is received. For example, if donation is received with specific instructions/mutual understanding between the donor and the receiver that religious place will host an advertisement promoting business of the donor, such donation will be subject to GST. However, if donation is received without such instructions or without a quid pro quo in the form of supply of any goods or services by the receiver to the donor, it shall not be subject to GST.
Example – Durgadevi Trust, a religious trust registered under section 12AA of the Income-tax Act, owns and manages a temple in their locality. It rents the commercial shops located in the precincts of the temple for a rent of Rs. 10,000 per month per shop. The consideration so received is liable to GST as the consideration is not less than Rs. 10,000.
Example – Sarvshiksha Foundation, an educational institution registered under section 10(23C)(v) of the Income-tax Act, owns and manages a gurudwara. It rents the community hall located in the precincts of the gurudwara for a rent of Rs. 9,000 per day for a marriage function. The consideration so received is exempt from GST as the consideration is less than Rs. 10,000.