On Friday (19th April), the Supreme Court upheld an appellate tribunal’s ruling that Patanjali Yogpeeth Trust is liable to pay service tax for charging an entry fee for organising Yoga camps, both residential and non-residential. 

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

While dismissing the appeal by the Trust led by Yoga Guru Baba Ramdev, the bench 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.” 

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

Its order 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. According to the tribunal, a fee was collected from the participants by way of donation.

It stated, “Though this amount was collected as a donation, it was fees for providing the said services and hence covered under the definition of consideration.” 

The order added that the Commissioner of Customs and Central Excise, Meerut range has raised the service tax demand of approximately Rs 4.5 crore from October 2006 to March 2011, with penalty and interest.

The development came after the Patanjali Yogpeeth Trust had approached CETSAT to challenge the October 2012 order of the Commissioner of Customs & Central Excise, Meerut. 

The Trust had argued before the CESTAT that its activities were not taxable under the health and fitness services stating that as per the definition it extended to yoga for physical fitness and not yoga for therapeutic purposes. The Trust clarified that the contributions received from participants of these yoga camps were voluntary donations, not payments for any services rendered.

However, the CETSTAT rejected the arguments raised by the Trust. The tribunal had relied on the definition of “health and fitness service” in the Finance Act, 1994 as meaning “service for physical well-being such as a sauna and steam bath, Turkish bath, solarium, spas, reducing or slimming salons, gymnasium, yoga, meditation, massage (excluding therapeutic massage).”

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

In its order, the appellate tribunal 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.” 

It added, “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.” 

According to the appellate tribunal, the Trust collected the entry fee disguising it as a donation. 

It had said, “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.” 

Misleading ad case

Yoga Guru Baba Ramdev is currently embroiled in another legal battle as the Supreme Court bench comprising Justices Hima Kohli and Ahsanuddin Amanullah has rapped him on multiple occasions in the alleged ‘misleading ads’ case. The court also rejected his apology as ‘mere lip service’. 

During a hearing on 16th April, Baba Ramdev and Patanjali Ayurved MD Acharya Balkrishna proposed to “redeem themselves” and take several steps on their own initiative for the same. Baba Ramdev also offered to issue a public apology for the misleading advertisement case. Following this, the Supreme Court bench adjourned the matter next for 23rd April.