No GST on rental of 'sarais' under religious or charitable trust: CBIC

The Union Finance Ministry on Thursday said 'sarais' run by religious or charitable trusts are exempt from the Goods and Services Tax (GST) irrespective of rent.

Certain 'sarais' managed by the Shiromani Gurdwara Parbandhak Committee (SGPC) on their own started collecting GST for rents up to Rs 1,000 per day after the decisions on the recommendations of the 47th GST Council meeting came into effect from July 18, 2022.

As per the recommendation, hotel rooms having room rents up to Rs 1,000 per day were brought under the GST rate slab of 12 per cent from the earlier exempt category.

However, the GST is not applicable on room rent in religious precincts by a charitable or religious trust, the Central Board of Indirect Taxes under the Finance Ministry said in a series of tweets.

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, it said, adding this exemption continues to be in force without any change.

This exemption is available as per the notification dated June 28, 2017.

"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 managed by the same trust/management," another tweet said.

This view has been consistently taken by the Centre even in the pre-GST regime, it said, adding that state tax authorities may also take the same view in their jurisdiction.

It has come to the notice that the three Sarais -- Guru Gobind Singh NRI Niwas, Baba Deep Singh Niwas, Mata Bhag Kaur Niwas -- managed by the SGPC in Amritsar have started paying GST with effect from July 18, 2022.

"These sarais managed by the SGPC may therefore avail the above stated exemptions in respect of renting of rooms by them," it said.