The Service Tax exempts renting of precincts of a religious place meant for general public from service tax liability. However, litigations took place throughout the country due to various interpretations to the term 'precincts'. Representations were made to CBEC. The matter has been examined.
'Religious Place' has been defined in the notification to mean a place which is primarily meant for conduct of prayers or worship pertaining to a religion,Franck Muller Conquistador Replica Watches meditation or spirituality. `General Public', according to the notification, 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 meaning of the word 'precincts' as given in various dictionaries was examined. Accordingly Precincts means the area that surrounds a building or place, especially one with a wall around it." or the parts or regions immediately surrounding a place; environs: the precincts of a town or the ground immediately surrounding a church, temple, or the like walled or otherwise bounded or limited space within which a building or place is situated.
Recently the Government issued Notification No. 40/2016 dated 6.9.2016 substituting the earlier definition. Accordingly, the exemption is now only an entity registered as a charitable or religious trust under of the Income-tax Act. Moreover, the CEBC issued instructions dated 6.9.2016 to clarify the issue.
In view of the above, the Board has issued instructions to the field formations that they 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.