Row over Karnataka Bill: what changes it proposed to how temples are taxed

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Last Updated01/03/2024

The Karnataka government’s attempt to tweak the law that governs taxation of Hindu temples was stymied in the Legislative Council.

The Karnataka Hindu Religious Institutions and Charitable Endowments (Amendment) Bill, 2024 was introduced in the Legislative Assembly
However, it was rejected two days later in the Legislative Council.
The first and the most contentious was that it intended to divert “10% of the gross income of institutions whose gross annual income exceeds Rs 1 crore
- To a common pool for the maintenance of temples, instead of the existing “10% of the net income of institutions whose gross annual income exceeds Rs 10 lakh
Net income is calculated based on the profits of the temple after accounting for its expenses, whereas gross income simply refers to the total amount of money the temple makes.

According to the Central Goods and Services Tax (CGST) Act, any business/entity has to register themselves under Goods and Services Tax
- If their aggregate turnover in a financial year exceeds Rs 40 lakhs (in all normal category states, except Telangana)
- And Rs 20 lakhs (in special category states, except J&K and Assam).
There is no separate tax for an entity/body belonging to a particular religion.
All services provided by charitable and religious trusts are not exempt from GST. A few of them are
- Services of transportation of passengers for a pilgrimage
- Events, functions, celebrations
- Shows against admission fee or tickets
- Some activities which are exempt include:
- Conduct of religious ceremony
- Renting of precincts of a religious place meant for general public
However, it must be noted that 'renting' should not apply to 'renting of rooms where charges are Rs 1000 or more per day
renting of shops for business and other commercial activities' and even 'renting of halls, space for Rs 10,000 or more per day.