Supreme Court Upholds Service Tax on Patanjali Yogpeeth’s Yoga Camps

In a recent judgment, the Supreme Court has upheld the decision by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), which mandates Patanjali Yogpeeth Trust to pay service tax for its yoga camps. The Trust’s appeal against the October 5, 2023, order was dismissed, affirming that the fees collected at these camps fall under “health and fitness service.” The Trust had argued that the charges were donations, but the tribunal identified them as payments for service, reinforcing the need for taxation.

The dispute originated from a 2012 order by the Commissioner of Customs & Central Excise in Meerut, which demanded over Rs 4.94 crore in taxes and penalties from the Trust for its yoga services. Despite the Trust’s argument that their camps primarily cater to physical rather than therapeutic fitness, CESTAT rejected this claim, citing a broad definition of health and fitness services in the Finance Act, 1994, which includes yoga.

Rejecting Patanjali’s notion of donations, CESTAT’s decision emphasized that the amounts collected were clearly for services provided, thus taxable. The ruling could set a precedent for other organizations offering similar health and wellness services under the guise of non-taxable donations.

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