Tax officials have started sending out notices to various Wakf boards for not paying service tax and GST on rent received from properties being used for non-religious and non-charitable purposes.
Only Kerala State Wakf Board and Dawoodi Bohra Wakf, Mumbai are registered under the Goods and Services Tax (GST) regime out of 30 Wakf boards in the country.
Wakf boards collectively are the largest owner of immovable property after defence and railways and the estimated tax revenue that could accrue to the exchequer could be around Rs 100 crore annually.
As per the service tax and GST laws, revenue generated from leasing of properties by Wakf boards for commercial purposes are liable to be taxed.The tax has to be levied on income unless they are specifically exempt and exemption would be available on revenue generated from premises rented for specific charitable and religious purposes.
Wakf property refers to the permanent dedication of any movable or immovable property for any purpose recognised by the Muslim law as pious, religious or charitable.
