Guruvayur Devaswom Board receives Tax Notice of Rs.4.5 Crore for GST Evasion

The Guruvayur Devaswom Board, one of Kerala’s major Hindu religious trusts, has been issued a Rs.4.52 crore Goods and Service Tax (GST) Notice following allegations of tax evasion over a six-year period.

The DGGI (Directorate General of Goods and Services Tax Intelligence), Kochi Zonal Unit, issued a notice accusing the board of failing to pay and underpaying GST on different services and transactions.

The Board, which is defending the charges, will appear before the Kochi Commissionerate to explain its reasoning. TNM has learned that the Devaswom Board is also on the Income Tax Department’s radar.

Such notices have previously been given to both the Sree Padmanabhaswamy Temple and the Sabarimala Temple, as per report.

According to the notice, which is available at TNM, the DGGI has been serving notices to the Devaswom board from December 2022.

The DGGI notice exposes irregularities in GST compliance across multiple income streams, such as parking fees, auditoriums, commercial spaces, cloakrooms, footwear counters, applications, and tender forms, as well as gold and silver donated by devotees to various temples. The show cause notice, issued on August 3, 2024, stated that the Guruvayur Devaswom Board was required to pay Rs 4,52,77,597 in taxes for services given between July 2017 and March 2023. In addition, the Board will have to pay an annual interest rate of 18%.

The Guruvayur Devaswom Board, founded under the Guruvayur Devaswom Act of 1978, oversees 11 temples in Kerala, including the well-known Sree Krishna Temple.

While the Board has not disclosed its annual earnings, an RTI response indicated that the temple had fixed deposits of Rs 2,053 crore, 271 acres of land, and 1,084.76 kg of gold. Of this, 869 kgs of gold are deposited with the State Bank of India, which produces around Rs 7 crore in interest per year.

The Devaswom Board had previously claimed exemption from taxation under Section 23BBA of the Income Tax Act of 1961, citing its status as a recognized entity that administers religious trusts. However, they have also come under scrutiny from the Income Tax Department.

The Devaswom Board has been informed that certain services it charges for, such as helicopter landing costs, vehicle hiring charges, immovable property rentals to banks, and advertising fees for advertisement published in the board’s magazines, books, diaries, and panchangams, are subject to taxation. The notice stated that Rs 3.19 crore of GST had not been assessed at all, and Rs 96.34 lakh had not been paid for other taxable services.

The DGGI estimated that dues of Rs 4,52,77,597 (Rs 2,26,38,798 each in CGST and SGST) had to be paid.

Speaking with TNM, Guruvayur Devaswom Board Chairman VK Vijayan indicated that the board was in talks with the DGGI and had not evaded any taxes. “They came to visit us, and if we are proven to be liable, we will pay. There are no problems between us. It is incorrect to say that we evaded taxes,” he stated.

In their response to the DGGI, the Devaswom Board claimed exemption under the Income Tax Act provisions.

While tax officials confirmed that certain goods, such as prasadam (edible offerings), are exempt from tax, they determined that non-edible offerings, such as precious metals like gold and silver, as well as many other services and transactions, were taxable, and the Board had not paid taxes on any of this.

The Guruvayur Devaswom Board’s appeal against some of the allegations will be heard by the Kochi Commissionerate.

“If their justifications are reasonable, we shall take them into account. If something needs to be dropped, we will do so, although this is unlikely as our stance is very clear,” a GST official stated.

If the action progresses to an order that goes against the Board, they will be required to pay a 100% penalty. However, the Board has the option of approaching the High Court or the Supreme Court.