No GST on room rent of 'sarais' managed by SGPC, clarifies CBIC

New Delhi, August 5

The Finance Ministry has said that the Goods and Services Tax (GST) will not apply on room rents of ‘sarais’ (inns) or properties managed by religious and charitable institutions.  

Certain ‘sarais’ managed by the Shiromani Gurdwara Parbandhak Committee (SGPC) had on their own started collecting GST for rents up to Rs 1,000 per day after the GST proposal on room rents below Rs 1,000 per day came into force on July 18, 2022.

“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,” said a clarification issued by the Central Board of Indirect Taxes and Customs (CBIC) late on Thursday evening following a demand from various quarters including AAP MP Raghav Chadha that the GST on rooms rented by religious institutions be withdrawn.

“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,” it tweeted. This view has been consistently taken by the Centre even in the pre-GST regime, it said, while advising state tax authorities to also take the same view in their jurisdictions.

Chadha had met Union Finance Minister Nirmala Sitharaman on Thursday and submitted a letter regarding withdrawal of the decision of imposing 12 per cent GST on ‘sarais’ (inns) located near the Golden Temple in Amritsar. The GST Council had in June decided that a 12 per cent tax will be levied on all hotel rooms that cost below Rs 1,000 per day.