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August 5, 2022

No GST on ‘Sarais’ run by religious, charitable trusts: CBIC

by CA Shivam Jaiswal in GST Circular Notification

No GST on ‘Sarais’ run by religious, charitable trusts: CBIC

Certain sections of the media and social media are spreading the message that GST has recently been imposed with effect from 18 July, 2022 even on ‘Sarais’ run by religious/charitable trusts. This is not true. Based on the recommendations of the 47th @GST Council meeting, GST exemption on hotel rooms having room rent upto Rs. 1000 per day has been withdrawn. They are now taxed at 12%.

However, there is another exemption which exempts renting of rooms in religious precincts by a charitable or religious trust, where amount charged for the room is less than Rs. 1000/- per day. This exemption continues to be in force without any change.

any other
of Section 9
Services by a person by way of
(a) conduct of any religious ceremony;
(b) renting of precincts of a religious leading place meant for general public, owned or managed by an entity registered as a charitable or religious trust under section 12AA of the Income-tax Act, 1961 (hereinafter referred to as the Income tax Act) or a trust or an institution registered under sub clause (v) of clause (23C) of section 10 of the Income-tax Act or a body or an authority covered under clause (23BBA) of section 10 of the said Income-tax Act:
Provided that nothing contained in entry
(b) of this exemption shall apply to,
i)renting of rooms where charges are one thousand rupees or more per day,
ii)renting of premises, community halls, kalyanmandapam or open area, and the like where charges are ten thousand rupees or more per day,
iii)renting of shops or other spaces for business or commerce where charges are ten thousand rupees or more per month.

It has been stated that the three Sarais managed by SGPC in Amritsar have started paying GST with effect from 18.7.2022. These three Sarais are:

1. Guru Gobind Singh NRI Niwas

2. Baba Deep Singh Niwas

3. Mata Bhag Kaur Niwas.

In this regard it is to clarify that no notice has been issued to any of these Sarais. These Sarais may have on their own opted to pay GST. The precincts of a religious place, in terms of above notification, has to be given broader meaning to include a Sarai even if it is located outside the boundary wall of a complex of a religious place, in the surrounding area, and manged by the same trust/management.

This view has been consistently taken by the Centre even in the pre-GST regime. State Tax authorities may also take the same view in their jurisdiction. These Sarais managed by SGPC may therefore avail the above stated exemptions in respect of renting of rooms by them.

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