Temple Hair Collection Licence Fee Taxable Under GST

Case Details: Rangaraj (Chelliah Rangaraj), In re [2026] 187 taxmann.com 307 (AAR - TAMILNADU)

Judiciary and Counsel Details

• C. Thiyagarajan & B. Suseel Kumar, Member

Facts of the Case

The applicant participated in e-auctions conducted by temples administered by the Hindu Religious and Charitable Endowments (HR & CE) Department for obtaining licences to collect tonsured human hair generated at temple premises. Under the terms of the e-tender, the successful bidder was granted only the right to collect the human hair and was not entitled to any share in the ticket charges, tonsuring charges, or any other receipts of the temple. The applicant contended that no service was being provided by the temple authorities, that activities connected with religious worship were outside the scope of GST, and that the temples were not engaged in any business activity. It was further argued that, since the supply of human hair is exempt under Notification No. 10/2025-Central Tax (Rate), the auction/licence fee paid for obtaining the right to collect such hair could not be regarded as consideration for a taxable supply. The matter was therefore placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that the grant of a licence for consideration constitutes a supply made in the course or furtherance of business and is therefore covered within the scope of Section 7 of the CGST Act. It observed that the amount collected by the temple authorities through the auction process represents consideration for granting the right to collect human hair from temple premises. The AAR further clarified that Notification No. 10/2025-Central Tax (Rate) exempts the supply of human hair as goods, whereas the transaction under consideration involves the grant of a licence to collect human hair, which is a supply of service classifiable under SAC 9997. Accordingly, the exemption applicable to the supply of human hair does not extend to the licensing activity, and the auction/licence fee charged by the temple authorities is liable to GST.

List of Cases Reviewed 

• Anmol Industries Ltd. v. West Bengal Authority for Advance Ruling, GST [2023] 150 taxmann.com 3/98 GST 546/75 GSTL 46 (Calcutta) (para 8.7)
  

  List of Cases Referred to

• Anmol Industries Ltd. v. West Bengal Authority for Advance Ruling, GST [2023] 150 taxmann.com 3/98 GST 546/75 GSTL 46 (Calcutta) (para 8.6)