Case Law Details
Church of South India Trust Association Vs Commissioner of CGST & Central Excise (CESTAT Chennai)
The case of Church of South India Trust Association vs Commissioner of CGST & Central Excise (CESTAT Chennai) revolves around the issue of whether the Church of South India Trust Association (CSITA) is liable to pay service tax on renting out its immovable properties for commercial activities prior to 1st July 2012.
CSITA, a constituent of the Church of South India (CSI), owns various properties and rents them out for commercial purposes. The intelligence gathered by the tax authorities indicated that CSITA was receiving rental income that was taxable under the category of ‘renting of immovable property service’. A show cause notice was issued to CSITA for the period from 1st October 2008 to 30th September 2013, proposing to demand service tax, interest, and penalties for not registering under the said service category and not paying the applicable taxes.
CSITA argued that it is a religious body and thus exempt from paying service tax under the Finance Act 1994. It presented its memorandum of association, which outlined its objectives of acquiring and managing immovable properties for religious purposes, including the maintenance of churches, prayer houses, hospitals, and schools. CSITA also provided a certificate from the Income Tax department classifying it as a religious and charitable institution/association.
The tax department, however, contended that CSITA was only a charitable institution and not a religious body, as it primarily engaged in commercial activities by renting out its properties. The department argued that CSITA’s certificate from the Income Tax department only classified it as a charitable association, not a religious body.
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