The Guruvayur Devaswom Board, one of the largest Hindu religious trusts in Kerala, has been slapped with Rs 4.52 crore Goods and Service Tax (GST) after being accused of tax evasion over a six-year period. The notice issued by the Directorate General of Goods and Services Tax Intelligence (DGGI), Kochi Zonal Unit, accused the board of non-payment and underpayment of GST on various services and transactions. The Board, which is contesting the charges levied, will appear before the Kochi Commissionerate to explain its rationale. TNM has learnt that the Devaswom Board is also under the Income Tax Department’s radar. As the story explains, such notices have been sent in the past to Sree Padmanabhaswamy Temple and the Sabarimala Temple too.
According to the notice, a copy of which is available with TNM, the DGGI has been serving notices to the Devaswom board since December 2022. The DGGI notice highlights discrepancies in GST compliance across several revenue streams, including parking fees, auditoriums, commercial spaces, cloakrooms, footwear counters, applications, and tender forms, gold and silver the various temples received from devotees. The show cause notice issued on August 3, 2024, said the Guruvayur Devaswom Board had to cough up Rs 4,52,77,597 as tax for services rendered between July 2017 and March 2023. In addition, the Board will also have to pay an interest rate of 18% per year.
The Guruvayur Devaswom Board, established under the Guruvayur Devaswom Act of 1978, manages 11 temples in Kerala, including the renowned Sree Krishna Temple. While the Board has not revealed its annual revenue, an RTI response revealed that the temple had Rs 2,053 crore in fixed deposits, 271 acres of land, and 1,084.76 kilograms of gold. Of this, 869 kgs of gold are deposited with the State Bank of India, which generates about Rs 7 crore in interest annually.
The Devaswom Board had earlier claimed exemption from taxation under Section 23BBA of the Income Tax Act, 1961, citing its status as an approved institution administering religious trusts. However, they have been under scrutiny from the Income Tax Department as well. In March of this year, the I-T Department inspected Devaswom Board offices and records. In a statement issued later, the Department said that the Board had been unresponsive to statutory notices issued by the Department and violated legal provisions of the IT Act 1961 without any reasonable cause.
Further, the I-T Department also accused the Board of not conducting any statutory audit from the financial year 2018-19 and not preparing any consolidated annual receipts and expenditure statements. The Devaswom was also unable to provide proper documents and details during the inspection.
Key findings
The Devaswom Board has been told that certain services it charges for—such as helicopter landing fees, vehicle hire charges, renting immovable properties to banks, and advertising fees for ads published in magazines, books, diaries, and panchangams produced by the board—are liable to be taxed. The notice said that Rs 3.19 crore of GST had not been assessed at all and Rs 96.34 lakh had not been paid on other taxable services.
Collectively, the DGGI assessed that dues amounting to Rs 4,52,77,597 (Rs 2,26,38,798 each in CGST and SGST) had to be paid.
An inspection conducted by DGGI on May 16 and 17, 2024, revealed that the Devaswom Board had been short-paying (paying less than the full amount) tax during various periods between July 2017 and March 2023. The notice accused the Board of suppressing its turnover and evading taxes under Section 122(1)(i) of the CGST Act, 2017. It also said that Section 59 (every registered taxpayer must self-assess their tax liability and file regular GST returns), Section 33 (all invoices or relevant documents clearly indicate the GST amount charged, ensuring transparency in transactions), and Section 9 (levy of GST on all intra-state supplies of goods and services, except for exempted categories or cases where the reverse charge mechanism applies), were also violated by the Board.
‘We did not evade tax’
Speaking to TNM, Guruvayur Devaswom Board Chairman VK Vijayan stated that the board was in discussions with the DGGI and had not evaded any taxes. "They visited us, and if we are found liable to pay something, we will comply. There are no issues between us. It is incorrect to say that we have evaded taxes," he said.
In their reply to the DGGI, the Devaswom Board sought shelter under the exemption provided by Income Tax Act provisions. “Guruvayoor Devaswom Managing Committee is recognised as an approved institution under Section 23BBA of the Income Tax Act, 1961. As a result, the income generated by the Guruvayoor Devaswom Managing Committee is entirely exempt from taxation, and such entities are not required to file income returns under Section 139 of the Act,” the Board said in one of their responses to the DGGI. Additionally, they noted that TDS (tax deducted at source) on the income of these entities was not necessary.
The 23 BBA of the Income Tax Act says, “constituted or appointed by or under any Central, State, or Provincial Act which provides for the administration of any one or more of the following, public religious or charitable trusts or endowments (including maths, temples, gurdwaras, wakfs, churches, synagogues, agiaries, or other places of public religious worship) or societies for religious or charitable purposes registered as such under the Societies Registration Act, 1860 (21 of 1860).”
While the tax officials acknowledged that certain items, such as prasadam (edible offerings), are exempt from tax, they held that non-edible offerings like precious metals like gold and silver and many other services and transactions were taxable, and the Board had not paid taxes on any of this.
Another Devaswom official, speaking to TNM on the condition of anonymity, said that the board has paid all necessary taxes. "They have asked us to appear at the Kochi office, and our consultant will represent us there to clarify the details. We have already paid GST on applicable items as we deemed appropriate. However, we cannot comply with every demand, such as charging GST on temple prasadam, which we do not impose on devotees. For other taxable services on the list, we are already remitting GST," the official added.
In July 2024, the central GST department issued a similar notice to the Sree Padmanabhaswamy Temple management committee, demanding the remittance of an outstanding tax amount of Rs 1.57 crore, accumulated since 2017. A few years ago, a comparable summons was issued to the Sabarimala Temple, which paid around Rs 20 crore without contesting the demand. As a result, no further notices were issued to the temple.
In the case of the Guruvayur Devaswom Board, which has decided to contest some of the charges, their representation will be heard by the Kochi Commissionerate. “If their explanations are acceptable, we will take them into consideration. If something needs to be dropped, we will drop it, although that is unlikely as our stance is very clear,” a GST official said.
If the matter proceeds to an order and it goes against the Board, they will have to pay a 100% penalty. However, the Board can approach the High Court or Supreme Court.
