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GST threat looms large over TTD

GST threat looms large over TTD
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Highlights

GST comes as a bolt from the blue for TTD, with the Union finance minister Arun Jaitley categorically stating that the religious organisation would not be exempted from it. In the GST council meeting held on June 11 at New Delhi, state finance minister Yanamala Ramakrishnudu’s plea for an exemption was turned down, though he was hopeful of getting the exemption in the next meeting.

Tirupati: GST comes as a bolt from the blue for TTD, with the Union finance minister Arun Jaitley categorically stating that the religious organisation would not be exempted from it. In the GST council meeting held on June 11 at New Delhi, state finance minister Yanamala Ramakrishnudu’s plea for an exemption was turned down, though he was hopeful of getting the exemption in the next meeting.

Highlights:

  • Union finance minister Arun Jaitley dismisses plea and categorically stated that the religious institution will not be exempted
  • TTD enjoyed tax free status till date

The richest Hindu religious institution has to pay the tax on hiring the cottages to the commercial taxes department. They also need to pay taxes like sale of human hair, etc. However, the institution was seeking exemption from paying tax saying that they were giving them for rent under no profit basis.

Donors built the cottages and handed over them to TTD, which is only collecting the rents from pilgrims who hire them. “Hence, Commercial taxes department served notice to them almost 10 years back to pay the luxury tax,” said a former CTO.
TTD has around 9,000 cottages / guest houses in Tirupati and Tirumala and other places like Chennai and Bengaluru and the rents range from Rs 50 per day to Rs 6,000 per day and was getting revenue of Rs 125 crore annually.


The rents above Rs 500 are liable to luxury tax. On Hotels, shops and sale of books they are getting another Rs 165 crore, besides Rs 124 crore through sale of laddus. It is continuously representing for exemption from tax and moved to tribunal on the issue. Since the issue was in tribunal they were paying fifty per cent of the actual tax amount.

However, TTD was able to manage and got exemption from it since April 2015.On the other hand the institution has approached the Apex court with an argument that they need not pay the service tax to the central excise and service tax department on various services they offer including the cottages, Kalayana mandapams, hotel buildings they leased out etc. Now the issue is pending in the court.

Under the scenario, GST is like sword of Damocles for TTD, as it has to pay crores of rupees as tax. If they are given exemption, the Central government fears that it will open a Pandora’s Box with several other religious institutions putting forward similar requests.

On other hand, if they were not given the exemption the crores of pilgrims, who visit the hill shrine, would have to bear additional burden of GST as the TTD will eventually shift the tax. After Jaitley’s categorical denial of exemption, the TTD authorities were spending sleepless nights looking with a ray of hope at final meeting of GST Council to be held on June 18 before the new tax regime comes into force.

By V Pradeep Kumar

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