In a circular (200/10/2016) dated 6th September 2016, the Central Board of Excise and Customs (CBEC) has clarified the scope of Notification No. 25/2012-Service Tax dated 20.06.2012, SI. No. 5(a).
The said notification exempted services by way of renting of precincts of a religious 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, 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 Income-Tax Act.
The notification also defined the term ‘Religious Place’, means a place which is primarily meant for conduct of prayers or worship pertaining to a religion, meditation or spirituality.
According to the notification the term `General Public’ means the body of people at large, sufficiently defined by some common quality of public or impersonal nature. `Renting’ has been defined in the Finance Act, 1994 as allowing, permitting or granting access, entry, occupation, use or any such facility, in any immovable property, with or without the transfer of possession or control of the said immovable property. However, the word ‘precincts’ appearing in the notification has not been defined and this gives rise to difficulty/ disputes in interpreting scope of the said exemption notification.
The notification also relied recent orders of Income Tax Appellate Tribunal and clarified that, in the case of CCE, Mangalore Vs. Dakshina Kannada Mogaveera Mahajana Sangha [2010(17) S.T.R. 258 (Tri.- Bang.)]., involving identical issue, CESTAT, Bangalore held after perusing the photographs of the temple complex that since the entire temple complex and marriage hall were enclosed by a boundary wall, the marriage hall was within the precincts of the temple and thus eligible for benefit of Notification No. 14/2003-Service Tax.
The Supreme Court has also held in the context of Notification No. 63/1995‑Central Excise dated 16.03.1995, in the case of South Eastern Coalfield Ltd. vs Commissioner of Customs and Central Excise, Madhya Pradesh[2006(200) E.L.T. 357 (S.C.)] that the word ‘precincts’ has to be given the broader meaning and not the narrower meaning. The word ‘precinct’ in the exemption notification No. 63/1995-Central Excise dated 16.03.1995 was interpreted by the Hon’ble Apex Court to mean the surrounding region or area. as defined in Collins English Dictionary or the surroundings or environs of a place as defined in the New Shorter Oxford English Dictionary.
In view of the above, field formations may not take a restricted view of the word ‘precincts’ and consider all immovable property of the religious place located within the outer boundary walls of the complex (of buildings and facilities) in which the religious place is located, as being located in the precincts of the religious place. The immovable property located in the immediate vicinity and surrounding of the religious place and owned by the religious place or under the same management as the religious place, may be considered as being located in the precincts of the religious place and extended the benefit of exemption under Notification No. 25/2012-Service Tax, SI. No. 5(a) dated 20.6.2012, the notification also said.
Read the full text of the notification below.
