Charitable & Religious Activities Exempt from GST Explained

When India introduced GST, one concern was how it would affect non-profit organizations, religious trusts, and charitable institutions. Since these entities work for public welfare and not for profit, taxing them could discourage social work and community services.

This blog explains the scope, conditions, and examples of GST exemptions related to charitable and religious activities in India.

1. Legal Basis for Exemption

The power to exempt these services comes from Section 11 of the CGST Act, 2017, read with Notification No. 12/2017-Central Tax (Rate).

Key entries relevant to charitable and religious activities are:

• Entry No. 1: Services by entities registered under Section 12AA/12AB for charitable purposes.
• Entry No. 13: Conduct of religious ceremonies by religious institutions.
• Entry No. 60: Renting of precincts of religious places meant for the general public.
• Entry No. 80: Services by way of training or coaching in recreational activities relating to arts, culture, or sports.

Each of these has its own conditions and examples, which we’ll explore below.

2. Meaning of Charitable Activities under GST

The term “charitable activities” is specifically defined under the notification and includes:

1. Public health services –

Such as care or counselling for:

• terminally ill persons or those with HIV/AIDS,
• physically or mentally abused individuals,
• drug addicts and alcoholics, etc.

2. Advancement of religion, spirituality, or yoga –

Services related to the promotion or teaching of spiritual or yogic disciplines.

3. Advancement of educational programs or skill development –

Especially for abandoned children, orphans, the homeless, the elderly, or differently-abled persons.

4. Preservation of the environment –

Including reforestation, protection of wildlife, and conservation of natural resources.

So, only activities that fall into these defined categories are exempt — not every service offered by a charitable trust.

3. Entry No. 1 – Services by Charitable or Religious Trusts

What It Covers

Services provided by an entity registered under Section 12AA or 12AB of the Income Tax Act by way of charitable activities are exempt from GST.

This means that NGOs, charitable hospitals, or spiritual organizations officially recognized under tax law don’t need to pay GST on activities that qualify as charitable.

Illustration Example:

A charitable trust runs a home for abandoned children and offers free education and shelter.

👉 All such services are exempt from GST as they qualify under “advancement of educational programs for abandoned children.”

However, if the same trust rents out a hall for commercial functions (like marriages or exhibitions), GST would apply — since that’s not a charitable activity.

4. Entry No. 13 – Conduct of Religious Ceremonies

Religious ceremonies are deeply embedded in Indian society — marriages, festivals, and other rituals. To ensure that such ceremonies are not burdened with tax, GST provides complete exemption.

What It Covers

Services by any person by way of conduct of religious ceremonies are exempt from GST.

These include:

• Performing pujas, yajnas, or religious rituals
• Organizing religious processions or events
• Conducting ceremonies such as marriage, thread ceremony, or death rituals

Example:

A temple priest performs a wedding ceremony and charges a nominal dakshina.

👉 This service is exempt from GST as it falls under the conduct of a religious ceremony.

But if a commercial event organizer arranges a “spiritual concert” and sells tickets, it is not exempt — because the purpose is entertainment, not religious ceremony.

5. Entry No. 60 – Renting of Religious Precincts

This is one of the most practical and widely applied exemptions for religious places like temples, mosques, churches, and gurudwaras.

What It Covers

Services by a religious place (of any faith) by way of:

• Renting of rooms,
• Renting of community halls, or
• Renting of shops in its premises are exempt subject to monetary limits.

Conditions as per Notification:

• Rooms rented to the general public are exempt if the rent per day does not exceed ₹1,000.
• Community halls or kalyan mandapams are exempt if the rent per day does not exceed ₹10,000.
• Shops or spaces in the precincts are exempt if the monthly rent does not exceed ₹10,000.

If rent exceeds these limits, GST applies only to that excess amount or transaction.

Illustration Example 1:

A temple trust rents a small guest room to pilgrims at ₹800 per day.

👉 Exempt under Entry 60, since it’s below ₹1,000 per day.

Illustration Example 2:

The same trust rents a hall for wedding functions at ₹12,000 per day.

👉 GST applies, because it exceeds the exemption limit of ₹10,000.

Illustration Example 3:

A mosque authority rents out a small stall to a bookshop selling religious texts for ₹6,000 per month.

👉 This is exempt under Entry 60 (since rent < ₹10,000/month).

6. Entry No. 80 – Yoga, Arts & Cultural Training

Religious and charitable organizations often promote yoga, meditation, arts, or cultural training. GST law supports these too.

What It Covers

Services by way of training or coaching in:

• Recreational activities related to arts or culture, or
• Sports (if provided by charitable or recognized institutions) are exempt from GST.

This includes:

• Yoga and meditation camps organized by registered trusts.
• Classical dance, vocal music, or painting classes conducted by recognized cultural institutions.

💡 Example:

A registered trust conducts yoga camps and charges nominal fees to cover expenses.

👉 Exempt from GST, as it promotes advancement of spirituality and yoga.

However, if a private company organizes a yoga camp and charges high participation fees as a business activity, it is taxable.

7. Exempt vs Taxable Services – Charitable Trusts

Not all services by charitable trusts are exempt. Only those falling under defined charitable activities qualify. The table below summarizes it:

8. Case Examples

Case 1 – Bhavyajyoti Foundation

• A charitable trust provides vocational training to differently-abled youth.
• It also sells handmade products made by trainees.

👉 The training services are exempt, but the sale of products (goods) is taxable, as it is a separate commercial supply.

Case 2 – KMVN Charitable Trust

• The trust operates a guest house for pilgrims at ₹800/day and also runs a canteen.
• Room rent is exempt (below ₹1,000/day), but the canteen food supply is taxable as it’s a composite supply of goods.

Case 3 – Durgadevi Temple Trust

• The trust conducts navratri pujas and religious yatras and charges a participation donation.
• Since it is in relation to a religious ceremony, it is exempt under Entry 13.

9. Religious Activities – General Conditions

For religious places or activities to qualify for exemption:

• The place must be meant for the general public (not restricted to a particular group).
• The activity must relate directly to religious worship, ceremony, or spirituality.
• Any commercial use (shops, hotels, event halls) beyond the monetary limits makes it taxable.

10. Registration under Section 12AA / 12AB – Why It Matters

Only trusts registered under Section 12AA (old) or 12AB (new) of the Income Tax Act are eligible for these exemptions.

This ensures that:

• Only genuine charitable organizations benefit, and
• Commercial entities cannot misuse the exemption by claiming to be “non-profits.”

11. Summary of Exempt Entries for Quick Reference

12. Impact on Input Tax Credit (ITC)

Charitable and religious institutions providing only exempt services cannot claim ITC on inputs (goods or services) used.

However, if they also carry on taxable activities (like renting halls), they can claim ITC proportionately for taxable supplies.

13. Key Takeaways

• Charitable and religious services are exempt under Notification 12/2017, provided conditions are met.
• Only registered charitable trusts (u/s 12AA/12AB) qualify.
• Renting exemptions apply within specified monetary limits.
• Religious ceremonies and yoga/spiritual activities are completely exempt.
• Mixed activities (exempt + taxable) require careful record-keeping for ITC.
• Exemptions support India’s social, cultural, and spiritual ecosystem while maintaining tax fairness.

14. Conclusion

The GST framework respects India’s deep-rooted charitable and religious traditions. By exempting specific activities, it recognizes that social service, spirituality, and faith-based initiatives should not be treated like commercial enterprises.

Through clear definitions and conditions, the law ensures that genuine trusts and religious institutions are supported — not taxed. This balanced approach under Notification No. 12/2017, backed by Section 11 of the CGST Act, helps maintain both social harmony and fiscal discipline in India’s taxation system.

Also Read: List of Goods Exempt from GST (Essential Commodities)