The Supreme Court upheld the CESTAT ruling and held that Ramdev’s Patanjali Yogpeeth Trust is liable to pay Rs 4.95 crore to tax authorities for Yoga camps.
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NEW DELHI: The Supreme Court upheld the decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), affirming that Ramdev’s Patanjali Yogpeeth Trust is obligated to pay Rs 4.5 crore to tax authorities for levying an entry fee for organizing Yoga camps.
The bench, comprising Justices Abhay S Oka and Ujjal Bhuyan, declined to overturn the ruling issued by the Allahabad CESTAT bench against Yoga luminary Ramdev and his associate Acharya Balkrishna’s Patanjali Trust.
The genesis of this legal dispute dates back to October 2023 when the tribunal determined that the Yoga camps organized by the Patanjali Yogpeeth Trust solicited fees from participants, thus falling within the purview of health and fitness services, subject to service tax. This decision ensued after Ramdev contested an order by the Commissioner of Customs and Central Excise of Meerut, which had raised a service tax demand of Rs 4.5 crore for the period spanning from October 2006 to March 2011, along with penalties and interest, as reported by PTI.
Investigations revealed that the Patanjali Trust, under the leadership of Ramdev and Acharya Balkrishna, conducted Yoga training sessions at various residential and non-residential camps, collecting funds from participants in the form of donations. CESTAT concluded that the funds collected constituted entry fees for these camps, notwithstanding being designated as donations. Consequently, the tribunal deemed these amounts taxable as remuneration for the services rendered.
Notably, Patanjali Trust issued entry tickets of various denominations, entailing diverse privileges for ticket holders based on the denomination.
Patanjali’s defense in court rested on the assertion that it offered services aimed at curing ailments, thereby falling outside the taxable ambit of health and fitness services. However, the court found this argument unsubstantiated by evidence.
CESTAT’s ruling categorized Patanjali Trust’s activities as falling under the taxable bracket of services provided by health clubs and fitness centers, as outlined in Section 65 (52) of the Finance Act. This legal development underscores the significance of delineating the scope of taxable services within the domain of health and wellness, highlighting the need for adherence to regulatory frameworks in the provision of such services.
The tribunal also emphasized the absence of concrete evidence substantiating Patanjali Trust’s assertion that they administered treatments for specific ailments during these camps.
It underscored that the instructions on ‘Yoga’ and ‘Meditation’ were imparted to the collective gathering rather than tailored to individual participants.
Notably, there were no personalized prescriptions, diagnoses, or treatments targeting specific complaints or ailments of individuals attending these camps.
This observation underscores the generalized nature of the services provided, further supporting the tribunal’s classification of Patanjali Trust’s activities within the taxable domain of health club and fitness center services.
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