The Applicant, M/s Shri MalaiMahadeshwara Swamy Kshetra Development Authority is constituted under the MM Hills Development Authority Act, 2014 which is headed by the Chief Minister of Karnataka.
The authority is registered as a religious and charitable institution u/s 12AA 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 case where Authority has floated tenders for collection of vehicle entry fees, which is access to temple premises and Authority sells laddoos, kallusakkare, ThirthaPrasada, Cloth bags, and other articles. In addition to this ,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.
The authority ruled that , “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 and entry to 8 of Notification 102/2017) No FD 48 CSL 2017 dated 29.06.2017.
But if goods other than prasadam are sold, they would be able to tax at appropriate rates applicable to those goods”.
The Karnataka Authority of Advance Ruling (AAR) ruled that the “sale of prasadam” by temples is exempted under Goods and Service Tax (GST). If goods, other than prasadam, are sold, then it would be liable to tax at the appropriate rate of taxes.