Setback For Ramdev: Supreme Court Upholds Tribunal Order For Service Tax

Supreme Court on Friday upheld an appellate tribunal’s ruling that his organisation is liable to pay service tax for changing an entry fee for organizing Yoga camps, both residential and non-residential. The ruling has come as a setback to the Patanjali Yogpeeth Trust.

A bench of Justices Abhay S Oka and Ujjal Bhuyan refused to interfere with the October 5, 2023 decision of the Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)

The bench while dismissing the Trust’s appeal stated that the tribunal has rightly held the Yoga on campus for a fee is a service. “We do not find any reason to interfere with the impugned order. The appeal is dismissed,” the court stated.

The court noted that the Trust which is working under Yoga guru Ramdev and his aide Acharya Balkrishna was engaged in providing Yoga training at various residential and non-residential camps.

In its order, the CESTAT had held that Yoga camps organised by Patanjali Yogpeeth Trust, which charges fees for participation, come under the category of “health and fitness service” and attracts service tax.

The tribunal has said that the fees were collected from the participants by way of donation. “Though this amount was collected as a donation, it was fees for providing the said services and hence covered under the definition of consideration,” it had noted, adding that the Commissioner of Customs and Central Excise, Meerut range has raised the service tax demand of approximately ₹ 4.5 crore for October, 2006 to March, 2011, with penalty and interest.

The court in its reply said that the Trust had contended it was providing services which are for curing ailments. They are not taxable under “health and fitness service,” it had said.

In its reply it has stated that 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.

Further, the appellant tribunal said the Trust collected the entry fee disguising it as a donation. “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,