Yoga camps for fee: SC upholds CESTAT order for tax on Patanjali Trust

In a setback to the Patanjali Yogpeeth Trust, the Supreme Court on Friday upheld an appellate tribunal's ruling that the organisation is liable to pay service tax for charging an entry fee for organising Yoga camps, both residential and non-residential.

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 said, "The tribunal has rightly held that Yoga in camps for a fee is a service. We do not find any reason to interfere with the impugned order. The appeal is dismissed."

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 attract service tax.

It had noted that the Trust, working under Yoga guru Ramdev and his aide Acharya Balkrishna, was engaged in providing Yoga training at various residential and non-residential camps.

The tribunal had said a fee was 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 Rs 4.5 crore for October, 2006 to March, 2011, with penalty and interest.

In its reply, 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.

The appellate tribunal in its order said, "In our view the appellant (Patanjali Trust) was engaged in providing the services that were classifiable under the taxable category of services provided by health club and fitness centre, as defined under Section 65 (52) of the Finance Act, to any person.

"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.

The appellate tribunal said the Trust collected the entry fee disguising it as 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.