Renting of immovable property

Yes as per mega notification no 25/2012 dtd 20-06-2012, service tax is exempt for the said service.

thanks for the reply Ajit , But whether renting to a Bank will also be covered as the mega notification states renting to general public.Kindly clarify

No you have not interpreted the clause in a correct way. It states that services by way of renting of a place surrounding a religious place meant for general public is not liable to service tax. In your case service tax will be imposed.

The renting to the bank is well within the area of the religious place.

The legislation intention is to exempt the religious place from service tax. To effect the same the said clause has been incorporated in the mega notification. Now, the same benefit cannot be extended for renting of a premises for a commercial purpose. Hence, the said activity will be liable to service tax.

Renting of precincts of a religous place meant for general public is exempt. Renting to bank is not exempted.

Renting of Precincts ( which means an enclosed or clearly defined area e.g. around a cathedral, temple etc - concise oxford dictionary) of a religious place meant for general public is exempt. In the mega notification general public is also defined as ' body of people at large sufficiently defined by some common quality of public or impersonal nature'.Now the issue is in relation to renting of precincts of a religious place to a Bank. Whether Bank gets fitted in this definition of general public , as basically it provides public services.

The basic of intent of exemption is the nature of transaction. If its for a religious purpose, for general public its exempt. But a bank is definetely for a religious purpose or for general public. Its purely commercial in nature and service tax would be imposed on that transaction.

The exemption notification doesnt state the purpose of renting it states " renting of precincts of religios place meant for general public". Precincts should be of  religious place   and renting should be for general public. Renting to General public may involve commercial and non commercial entities. Accordingly both entities will be covered.