The Central Board of Indirect Taxes and Customs (CBIC) has clarified that goods and services tax (GST) is not imposed on ‘Sarais’ run by religious or charitable trusts.
It refuted claims made by certain sections of the media and social media that GST has recently been imposed with effect from 18 July 2022 even on ‘Sarais’ run by religious or charitable trusts.
In a series of tweets, the CBIC said, based on the recommendations of the 47th GST Council meeting, GST exemption on hotel rooms having room rent up to Rs 1,000 per day has been withdrawn and they are now taxed at 12 percent.
It also said that, 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 1,000 per day. The CBIC said this exemption continues to be in force without any change.
It has been stated that the three ‘Sarais’ managed by SGPC in Amritsar have started paying GST with effect from 18th July 2022. These three ‘Sarais’ are Guru Gobind Singh NRI Niwas, Baba Deep Singh Niwas and Mata Bhag Kaur Niwas.
In this regard, it is to clarify that no notice has been issued to any of these ‘Sarais’, the CBIC said, adding these ‘Sarais’ may have on their own opted to pay GST.
It said the precincts of a religious place, in terms of the notification, have 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 managed by the same trust or management.
This view has been consistently taken by the Centre even in the pre-GST regime, it said and added that state tax authorities may also take the same view in their jurisdiction. These ‘Sarais’ managed by SGPC may therefore avail the exemptions in respect of renting of rooms by them.
