Supreme Court rejects pleas seeking exemption from GST on Haj, Umrah services

A batch of petitions filed by various private tour operators seeking exemption from the Goods and Services Tax (GST) for the Haj and Umrah services offered by them to pilgrims travelling to Saudi Arabia was rejected by the Supreme Court today.

A bench of Justice A. M. Khanwilkar, Justice A. S. Oka and Justice  C. T. Ravikumar pronounced the judgment.

The operative portion of the judgement was pronounced by Justice Oka, who said "We have dismissed the petitions on both the grounds of exemption and discrimination".

The judgement 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.

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, as per Article 245 of the Constitution.

It is their argument that the services consumed outside India cannot be subjected to GST.

The petitioners 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 argument forwarded was that the services offered to Hajis like flights, boarding are eligible for exemption granted to religious activities.