The Supreme Court on Friday banned the government from collecting service tax from the Tirupati Balaji Temple in Andhra Pradesh for accommodation of pilgrims.

The government has introduced a 12 per cent tax on all short-term accommodation from May 1, 2011, for which Rs 1,000 is charged per day. Since the Tirumala Tirupati Devasthanam Board is a religious institution, 50% exemption is granted.

Seeking to obtain service tax registration, the government issued a notice to the temple management on May 25, 2011, ordering it to pay back the interest tax with interest and penalties. A petition filed by the Andhra Pradesh High Court against the tax demand has lost the ownership of the High Court.

The Supreme Court, headed by Justice AK Patnaik, has issued a notice to the Finance Ministry on the request of the temple management seeking interim relief against the tax demand. The court prevented the tax authorities from taking tax action to recover tax dues until further orders.

*from various sources.