Exempt Haj pilgrimage from service tax – Supreme Court urged

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The Supreme Court on Wednesday will hear a plea seeking direction to the Centre to not levy service tax on Hajis who perform Haj through Haj Group Operators (HGO) and further to exempt them from service tax category as performing Haj is a religious activity. (All India Haj Umrah Tour Organizer Association, Mumbai Vs Union of India &. Ors.)

The petition is filed by Advocate on record Gaurav Agarwal and listed for virtual hearing before the bench of Justices A. M. Khanwilkar and S. Ravindra Bhat.

The petitioner, which is an association of Haj Group Organizers (HGOs) facilitates the Haj and Umrah religious ceremonies of pilgrims (Hajis) from India to Saudi Arabia.

Petitioner has filed this writ petition seeking- inter alia, a writ/ order/ direction declaring that the levy of service tax on the pilgrims (Hajis), who undertake religious pilgrimage of Haj and Umrah in the Kingdom of Saudi Arabia, is unconstitutional, infringing fundamental rights of the Hajis enshrined in Articles 14, 19, 21 and 25 of the Constitution.

It is the case of the Petitioner that no service tax could be levied on the Hajis for performing the Haj/ Umrah and in any event, the said service is exempted from taxation and thus HGOs are not liable to collect and pay service tax. Petitioner mentioned that about 70% of the Hajis, who go for Haj through Haj Committee of India, do not pay service tax as the Government has given exemption to Hajis who go through Haj Committee of India, while Hajis who go through HGOs are asked to pay service tax. This action is clearly discriminatory and arbitrary. On these grounds, the Petitioner preferred Writ Petition before this Hon’ble Court challenging the levy of service tax on the Hajis who go through HGOs.

The Writ Petition was disposed of by Supreme Court vide order dated 11.12.2019 which interalia directed that the Petitioner should withdraw its writ petition and make representation to the competent authority who was directed to decide the representation within 90 days and till that time no coercive action was to be taken against the Petitioner. It was also directed that if the decision of the competent authority was not favourable to the Petitioner, the Writ Petition could be revived.

The Petitioner made a detailed representation to the competent authority pursuant to the aforesaid order. The Government has now issued an order/letter on 05.05.2020 rejecting the said representation on various grounds in light of the decision of the GST Council dated 14.03.2020.

In this view of the matter, the Petitioner is approaching this Hon’ble Court by way of the present writ petition challenging the decision of the Respondents dated 14.03.2020 and 05.05.2020. The Petitioner humbly submits that the Petitioner has also challenged the Constitutional validity of Rule 8 of Place of Provision of Services Rules, 2012 in as much as it is being relied upon by the Respondents to contend that service tax can be levied on services rendered outside India.


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