The Supreme Court on Thursday dismissed a batch of petitions filed by various private tour operators seeking exemption from the Goods and Services Tax for the Haj and Umrah services offered by them to pilgrims travelling to Saudi Arabia.
A bench of Justices A. M. Khanwilkar, A. S. Oka and C. T. Ravikumar pronounced the judgment. Justice Oka, who read out the operative protion of the judgment, said “we have dismissed the petitions on both the grounds of exemption and discrimination”. Justice Oka said that the argument raised by the petitioners regarding extra territorial application of GST for services given outside India is kept open, as it is pending consideration before another bench. Full copy of the judgment is awaited.
The tour operators are challenging the levy of GST on Hajis who avail themselves of services offered by registered private tour operators on the grounds that no tax law can be applicable on extra territorial activities per Article 245 of the Constitution. It is their argument that the services consumed outside India cannot be sujbected to GST.
They also argued that the levy is discriminatory as it exempts certain hajis who undertake the pilgrimage through the Haj Committee of India. A GST levy of 5% (with input tax credit) is applicable on air travel by pilgrims who utilise the services of non-scheduled/charter operations for religious pilgrimage facilitated by the Centre under bilateral arrangements. However, if the services of a specified organisation in respect of a religious pilgrimage is facilitated by the External Affairs Ministry under bilateral arrangement, the rate would be nil.
The other limb of the argument is that the services offered to Hajis such as flight journey, accommodation etc, are eligible for the exemption granted to religious activities.
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