GST on Hajj and Umrah Services: Supreme Court dismisses Petitions by Tour Operators [Read Order]

GST - Hajj and Umrah Services - Supreme Court - Petitions - Tour Operators - taxscan

The Supreme Court, on Thursday has dismissed a bunch of petitions seeking exemption from the Goods and Services Tax for the Haj and Umrah services. The petition was filed by various private tour operators seeking GST exemption on the services provided by them to pilgrims travelling to Saudi Arabia.

Before the Apex Court, the petitioners argued that the levy of GST on Hajis who avail themselves of services offered by registered private tour operators is violative of Article 245 of the Constitution on the grounds that no tax law can be applicable on extra territorial activities. They further argued that the services consumed outside India cannot be sujbected to GST.

A two-judge bench comprising Justices A. M. Khanwilkar, A. S. Oka and C. T. Ravikumar observed that “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. 

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. Full copy of the judgment is awaited.

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