GST on Auctioned Rights by Religious Institutions: KER/01/2026
The Authority for Advance Ruling in Kerala decided that auctioning rights for commercial activities in temples is a taxable supply of services.
- Ruling
- ADVANCE RULING No. KER/01/2026 Dated 04/03/2026
- Dated
- 04 Mar 2026
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Auctioning rights to collect offerings or operate stalls is a taxable service.
- Harvesting coconuts from temple lands is exempt as an agricultural operation.
- Honorarium paid to board members is not subject to Reverse Charge Mechanism.
- Legal fees paid to unregistered suppliers remain subject to Reverse Charge Mechanism.
In short
The Travancore Devaswom Board asked if auctioning various rights within temple premises attracts Goods and Services Tax (GST). The authority examined whether these activities are purely religious or commercial in nature.
What has changed
How it worked before
Many religious institutions assumed that any activity conducted within temple premises was inherently religious and therefore exempt from GST.
What has changed
The authority ruled that when a religious body auctions rights for commercial exploitation, it acts as a business entity. This means activities like selling pooja items or operating toilets are taxable services, even if they occur in a religious setting.
Who this affects
Religious trusts, temple boards, and charitable organizations that auction rights for commercial activities.
An example
A local temple trust auctions the right to run a parking lot for pilgrims. They might assume this is exempt because it serves the temple. Based on this ruling, the trust should treat this as a taxable supply of services and collect GST on the auction amount.
What you should do
Review your auction and tender agreements to determine if they constitute a commercial license. Note that an Advance Ruling only binds the specific applicant and their tax officer; it is not a general law for all businesses.
If you do nothing
If you assume this ruling applies to you and stop paying tax, or conversely, pay tax on exempt items, you risk penalties during an audit. A tax officer may disagree with your interpretation, leading to interest charges and legal disputes. Always seek professional advice specific to your institution's activities.
The terms explained
- Reverse Charge Mechanism
- A system where the person receiving the service pays the tax directly to the government instead of the person providing the service.
- Supply of services
- Any activity that involves the transfer of rights or the provision of facilities for a fee, which is subject to GST.
- Business entity
- Any person or organization, including statutory bodies, that carries out trade, commerce, or any activity for a fee.
The ruling in detail
Authority for Advance Ruling
TRAVANCORE DEVASWOM BOARD
ADVANCE RULING No. KER/01/2026 Dated 04/03/2026 · Keralam
Questions before the authority
- Whether GST is applicable on the consideration received by the Applicant for assignment, through auction or tender, of the right to collect remnant rice offerings at Sabarimala?
- Whether GST is applicable on the consideration received by the Applicant for assignment, through auction or tender, of the right to collect coconuts and broken coconuts offered by devotees in temples under its administration?
- Whether GST is applicable on the consideration received by the Applicant for assignment, through auction or tender, of the right to collect clothing left by pilgrims in the Pamba River?
- Whether GST is applicable on the consideration received by the Applicant from auction or tender of agricultural produce, mainly coconut yield from temple lands?
- Whether GST is payable under the Reverse Charge Mechanism on honorarium and sitting fees paid by the Applicant to the President and Members of the Travancore Devaswom Board?
- Whether GST is payable under the Reverse Charge Mechanism on advocate fees or legal fees paid by the Applicant to suppliers who are not registered under GST?
- Whether GST is applicable on the consideration received by the Applicant for assignment, through auction or tender, of the right to perform temple rituals and customs such as Pulluvan Pattu and Balithara?
- Whether GST is applicable on the consideration received by the Applicant for assignment, through auction or tender, of the right to operate and maintain public toilets and washrooms exclusively for devotees within temple premises?
- Whether GST is applicable on the consideration received by the Applicant for assignment, through auction or tender, of the right to sell pooja items within temple precincts?
Facts
The applicant is a statutory body managing over 1,250 temples in Kerala. It generates revenue by auctioning or tendering various rights, including the collection of offerings, agricultural produce, and the operation of amenities like toilets and pooja stalls. The applicant contends these activities are incidental to religious services and not commercial in nature.
Ruling
| Question | What the authority ruled |
|---|---|
| Collection of remnant rice | Taxable supply of services Liable to GST |
| Collection of coconuts/broken coconuts | Taxable supply of services Liable to GST |
| Collection of abandoned clothes | Taxable supply of services Liable to GST |
| Harvesting of coconuts from temple lands | Exempt Exempt under Entry No. 54 of Notification No. 12/2017-Central Tax (Rate) |
| Honorarium and sitting fees | Not applicable Not liable to GST under RCM |
| Advocate/legal fees | Applicable under RCM Liable to GST under Entry No. 2 of Notification No. 13/2017-Central Tax (Rate) |
| Performance of rituals | Taxable supply of services Liable to GST |
| Operation of toilets/washrooms | Taxable supply of services Liable to GST |
| Sale of pooja items | Exempt Exempt under Entry No. 13(b) of Notification No. 12/2017-Central Tax (Rate) subject to monetary thresholds |
The Authority ruled that most of the applicant's auction-based activities constitute a **taxable supply of services** by way of granting a license or right for consideration. However, it held that the auctioning of rights to harvest coconuts from temple lands is exempt as a service related to agricultural operations. Additionally, it determined that honorarium and sitting fees paid to board members are not subject to the Reverse Charge Mechanism.
Reasoning
The Authority determined that the applicant is a business entity under Section 2(17) of the CGST Act and that its auctioning of rights constitutes a **supply of services** under Section 7(1). It reasoned that the applicant is granting an exclusive commercial license to third parties, which is distinct from the religious activities themselves. Exemptions were applied strictly based on specific entries in Notification No. 12/2017-Central Tax (Rate). The RCM liability for legal services was confirmed under Notification No. 13/2017-Central Tax (Rate), while board members were found not to be directors.
Provisions relied on
- Section 2(17) of the CGST Act, 2017
- Section 7(1) of the CGST Act, 2017
- Schedule II of the CGST Act, 2017
- Notification No. 12/2017-Central Tax (Rate)
- Notification No. 13/2017-Central Tax (Rate)
For the practitioner
This ruling clarifies that religious institutions acting as statutory bodies are considered business entities when they auction rights for commercial exploitation. It provides a clear distinction between exempt agricultural/religious services and taxable licensing services. Practitioners should note that the **commercial nature of the contract** overrides the religious context of the underlying activity.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/1-travancore_devaswom_board_ar_order.pdf
Legibility of the scan, as read: high.
Prepared 12-10-2026.
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