All INDIA Haj Umrah Tour Organizer Association Mumbai vs. Union Of INDIA & Ors

Held

The Court held that the services rendered by HGOs and PTOs to Haj pilgrims are taxable. The place of provision of service is determined by the location of the service recipient, which in this case, are Indian residents, making the place of provision within the taxable territory. Rule 2(i)(b)(iv) of the Place of Provisions of Services Rules, 2012, which considers the usual place of residence of the recipient, was applied. The Court also held that the exemption granted to the Haj Committee was not discriminatory. The Haj Committee, being a statutory body with no profit motive, constitutes a separate class distinct from HGOs. The exemption under sub-clause (b) of clause 5 of the Mega Exemption Notification applies to the service provider by way of conduct of any religious ceremony, which HGOs do not perform. The Court also noted that Clause 5A of the Mega Exemption Notification grants exemption to services rendered by Haj Committees in respect of a religious pilgrimage, distinguishing between 'religious ceremony' and 'religious pilgrimage'. The issue of extra-territorial operation of the service tax regime was expressly left undecided.

Facts

The petitioners, All India Haj Umrah Tour Organizer Association Mumbai, comprised of Hajj group organizers (HGOs) and Private Tour Operators (PTOs), challenged the levy of service tax on services rendered to Haj pilgrims for the Haj pilgrimage. They contended that if the service recipient is outside the taxable territory, service tax cannot be levied. Furthermore, they argued that the levy was discriminatory as it exempted certain hajis undertaking the pilgrimage through the Haj Committee, which they claimed was a similar service. The revenue contended that the services provided by HGOs and PTOs were taxable as they were provided or agreed to be provided within the taxable territory. The Haj Committee, being a statutory body with no profit motive, constituted a separate class.

Key Issues

1. Whether the services rendered by Hajj group organizers (HGOs) and Private Tour Operators (PTOs) to Haj pilgrims for the Haj pilgrimage are taxable for service tax, considering the place of provision of service under the Integrated Goods and Services Tax Act, 2017 and the Place of Provisions of Services Rules, 2012? (Question of law) Petitioner's argument: Service tax cannot be levied if the location of the service recipient is outside the taxable territory. They also argued that the levy is discriminatory as it exempts certain hajis who undertake the pilgrimage through the Haj Committee. Revenue's argument: Services rendered by HGOs and PTOs to Haj pilgrims are taxable as the services are provided or agreed to be provided in a taxable territory. The Haj Committee is a separate class due to its statutory nature and lack of profit motive, thus the exemption is not discriminatory.