In a setback to the Patanjali Trust, the Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has ruled that service tax can be levied on the consideration received by the Trust under Vanprastha Ashram Scheme.
The Trust is engaged in the activities of teaching Yoga and for research on Vedic traditions of Yoga and are registering the interested people in these activities as their members.
Under the Vanprastha Ashram Scheme, the appellant was leasing the accommodation to all those who are interested to visit the appellant premises till their life time on payment of certain amount ranging from Rs.5,00,000/- to 21,00,000/-. The department demanded service tax on the above consideration by finding the it is a taxable service under the Finance Act, 1994.
The Tribunal noted that as per the scheme, by making the above payment, a person does not become the member of the Trust as such, but become the lease-holder for a particular accommodation respective to the price paid by him under the Scheme.
“This observation is sufficient to hold that such person become the shareholders of the appellant’s Scheme but not the members of the Trust. Such members cannot be cloth with the status as that of founder members of the Trust and the element of mutuality therefore, is missing in such a relationship. The transaction with such members will be the one with some other person with no principle of mutuality involved. As such, the Trust and the member of Vanprastha Ashram Scheme become two different legal entities. Any services of club and association being provided by the appellant to such members are therefore, taxable services under Section 65 (25a) and are absolutely out of the scope of Sport Club (supra) decision. Hence we are of the opinion that the Adjudicating authority below has rightly confirmed the said demand,” the bench said.
Subscribe Taxscan Premium to view the Judgment
