The Karnataka Authority of Advance Ruling (AAR) ruled that the sale of prasadam by temples is exempted under GST law. However, if goods other than prasadam are sold then it would be liable to tax at the appropriate rate of taxes. Further GST is applicable on certain supply of services by temple.
The Applicant, M/s Shri MalaiMahadeshwara Swamy Kshetra Development Authority is constituted under the MM Hills Development Authority Act, 2014, headed by the Chief Minister of Karnataka. The authority is registered as a religious and charitable institution under Section 12-AA of the Income Tax Act. The applicant has been rendering various Seva services and supplies Prasada items to the pilgrims in Sri Mahadeshwara Swamy Temple at Male Mahadeshwara Hills. It also rents out accommodations and other commercial places, either by itself or sells off the rights to provide such services, and in lieu of this collects the money consideration.
The applicant sought the ruling on the issue of whether IGST/ CGST has to be collected by the Authority in the following cases:
- Authority has floated tenders for collection of vehicle entry fees, which is access to temple premises;
- The Authority sells laddoos, kallusakkare, ThirthaPrasada, Cloth bags, and other articles;
- The Authority has approximately 100 shops which are given on lease through auction;
- The Authority also conducts e-procurement auction for the service of tonsuring the heads of the devotees.
- The Authority has 16 Cottages/ rooms with 242 rooms which are given on rent and collect “vasathinidhikanike”
The authority ruled that 9% of KGST and 9% CGST will be applicable on the auctioning for collection of vehicle entry fees, auctioning of service of tonsuring the heads of devotees, auctioning of right to collect service charges and related to auctioning off the right to collect charges for vahana pooja. Further renting of commercial shops, if rent is more than Rs 10,000 p.m will be subject to 9% of KGST and 9% CGST. Further services of accommodation of pilgrims where charges are less than Rs 1000/- per day per room is exempt from tax.
“The sales of prasadam by the applicant is exempt from tax as per entry no 98 of the Notification No 2/2017 Central Tax (Rate) dated 28.06.2017. But if goods other than prasadam are sold, they would be able to tax at appropriate rates applicable to those goods,” the authority adjudged in its order.
The complete order of the AAR is given below:’
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