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Setback to Patanjali : SC upholds appellate tribunal's ruling Patanjali to pay service tax on Yoga camps

"The tribunal has correctly determined that Yoga camps charging a fee constitute a service. We see no grounds to challenge the contested order. The appeal is dismissed"

Written by  Shefali Kohli -- April 21st 2024 01:19 PM
Setback to Patanjali : SC upholds appellate tribunal's ruling Patanjali to pay service tax on Yoga camps

Setback to Patanjali : SC upholds appellate tribunal's ruling Patanjali to pay service tax on Yoga camps

Setback to Patanjali : In a major setback and no relief to the Patanjali Yogpeeth Trust, the Supreme Court dealt a blow to the Patanjali Yogpeeth Trust by affirming an appellate tribunal's decision that the organization is obligated to pay service tax for levying an entry fee for conducting Yoga camps, both residential and non-residential. 

Justices Abhay S Oka and Ujjal Bhuyan's bench declined to intervene with the October 5, 2023 ruling of the Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).


Rejecting the Trust's appeal, the bench stated, "The tribunal has correctly determined that Yoga camps charging a fee constitute a service. We see no grounds to challenge the contested order. The appeal is dismissed." The CESTAT's ruling classified Yoga camps organized by the Patanjali Yogpeeth Trust, which impose fees for participation, as falling within the category of "health and fitness services" subject to service tax.

The Trust, led by Yoga guru Ramdev and his associate Acharya Balkrishna, was found to be actively involved in offering Yoga training through both residential and non-residential camps. According to the tribunal, participants were asked to contribute a fee, which was framed as a donation.                   

The tribunal observed that although the funds were collected under the guise of donations, they essentially constituted fees for the services rendered, thereby falling within the definition of consideration. Consequently, the Commissioner of Customs and Central Excise, Meerut range, raised a service tax demand of approximately ₹4.5 crore for the period spanning October 2006 to March 2011, along with penalties and interest.

The Trust argued in response that it offered services aimed at curing ailments, which it believed did not fall under the taxable category of "health and fitness services."

However, the appellate tribunal disagreed, stating that the Trust was indeed providing services falling under the taxable classification of health club and fitness center services, as outlined in Section 65(52) of the Finance Act, to individuals.

"The claim of the appellant that they are providing treatment for specific ailments being suffered by the person is not supported by any positive evidence. Instructions on 'Yoga' and 'Meditation' in these camps are not imparted to an individual but to the entire gathering together. No prescriptions are made for any individual in writing, diagnosing and treating the specific ailment/complaint of any individual," it had said.

"They issued entry tickets of various denominations. The holder of the ticket was granted different privileges depending on the denomination of the ticket. In return the appellant provided the person entry to the camp where Swami Baba Ramdev would give instructions in respect of Yoga and Meditation," it had said.                    

- With inputs from agencies

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