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Government of India
Ministry of Finance
Department of Revenue
(Tax Research Unit)
Circular No. 200/10/2016-Service Tax
Dated: 6th September, 2016
To
Principal Chief Commissioners of Customs and Central Excise (All) Principal
Chief Commissioners of Central Excise & Service Tax (All) Principal Director
Generals of Goods and Service Tax/System/CEI Director General of Audit/Tax Payer
Services
Principal Commissioners/ Commissioners of Customs and Central Excise (All)
Principal Commissioners/Commissioners of Central Excise and Service Tax (All)
Principal Commissioners/Commissioners of Service Tax (All)
Principal Commissioners/Commissioners LTU/Central Excise/Service Tax (Audit)
Madam/ Sir,
Sub: Clarification regarding scope of Notification No.
25/2012-Service Tax dated 20.06.2012, Sl. No. 5(a).
I am directed to refer to the above mentioned subject and to say that it has
come to notice of the Ministry that difficulties are being faced in interpreting
the scope of
Notification No. 25/2012-Service Tax dated 20.06.2012, Sl. No.
5(a).
2. The matter has been examined. The said notification exempts services by
way of renting of precincts of a religious place meant for general public.
'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,
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.
3. The meaning of the word 'precincts' as given in various dictionaries is as
under:-
Cambridge English Dictionary
"The area that surrounds a building or place, especially one with a wall
around it."
Random House Unabridged Dictionary
Precincts:
"Precincts, the parts or regions immediately surrounding a place;
environs: the precincts of a town.”
"The ground immediately surrounding a church, temple, or the like. "
"A walled or otherwise bounded or limited space within which a building
or place is situated.
Black's Law Dictionary
'The immediate neighborhood ofa palace or court. "
4. 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.
5. 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.
6. 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, Sl. No.
5(a) dated 20.6.2012.
7. Wide publicity may be given so that the assessees and public are aware of
the above. All the major Industry and Trade Associations may be informed
accordingly. Difficulty if any, in the implementation of the Circular should be
brought to the notice of the Tax Research Unit.
8. All concerned are requested to acknowledge the receipt of this Circular.
Hindi version would follow.
Yours faithfully,
(Dr. Ravindra Kumar)
Technical Officer (TRU-II)
Tele No. 011-23095547
F. No. 354/45/2016-TRU
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