2022 (7) TMI 1233
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....rimage is undertaken by thousands of pilgrims from India, either through the Haj Committee of India (for short, 'the Haj Committee') or HGOs. There is a bilateral treaty between India and the Kingdom of Saudi Arabia. As per the said bilateral arrangement, the Haj pilgrimage can be undertaken from India only through the Haj Committee or HGOs. 3. The service tax regime was introduced in India in the year 1994 under the provisions of the Finance Act, 1994 (for short 'the Finance Act'). Initially, very few services were made subject to payment of service tax. However, by subsequent Finance Acts, a large number of services were added to the list from time to time. The total number of services subjected to service tax exceeded 100. A negative list regime was introduced by Act No.23 of 2012 with effect from 1st July 2012. By Act No.23 of 2012, Sections 66-B and 66-C were added. Section 66-B is the charging Section which provided that there shall be a levy of service tax at the rate of 12% on the value of all services other than those specified in the negative list. By amending Section 66-B, the percentage of service tax was enhanced to 14%. Section 66-C confers power on the Central Gover....
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.... the current batch of petitions have been filed by various organisations representing HGOs/PTOs. Only one petition, i.e. Writ Petition (C) No.1329 of 2020, has been filed by an individual petitioner who desires to undertake the Haj pilgrimage. Most of the petitions challenge the aforesaid orders rejecting representations. In some of the petitions, a declaration has been claimed that the provisions of the laws relating to service tax are not applicable to services rendered by HGOs and PTOs to Hajis for performing the religious activity of Haj/Umrah. In some of the petitions, there is a challenge to the validity of Rules 8 and 14 of the 2012 Rules. However, submissions have not been canvassed on the issue of validity. 6. Counter Affidavits have been filed in Writ Petition (C) Nos.755, 856 and 896 of 2020, which have been treated as common affidavits in this group of petitions. 7. At this stage, we may note here that in this batch of petitions, we are not dealing with the issue of extra-territorial operation of the service tax regime, as the said issue is pending for adjudication before another Bench. SUBMISSIONS OF THE PETITIONER 8. Shri Arvind P. Datar, the learned senior counse....
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....que Shiekh Bhikan and Anr. 2012 (6) SCC 265 held that grant of such a subsidy is contrary to the tenets of Islam as the tenets of Islam require the Haj pilgrims to perform the Haj ceremony with their own funds after discharging their debts and after making a provision for the benefit of their families. The learned senior counsel also relied upon a decision of this Court dated 4th February 2019 in Writ Petition (C) No.4 of 2019 (Federation Haj PTOs of India v. Union of India). He pointed out that the role played by the HGOs and PTOs is unique, which is recognized in both the above decisions. He pointed out that the said decisions note that HGOs/PTOs act as tour operators for pilgrims, provide a complete package right from the start of the journey from various places in India to Saudi Arabia, their arrangements for stay in Saudi Arabia, the performance of Haj Ceremony and safe return to India. He pointed out that the majority of Haj pilgrims are taken care of by the Haj Committee, and only a limited number of pilgrims can undertake Haj pilgrimage through HGOs/PTOs. He pointed out that the cost of the package provided by HGOs/PTOs consists of airfare from India to Saudi Arabia. He als....
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....this Court's decision in the case of Government of Kerala & Anr. v. Mother Superior Adoration Convent 2021 (5) SCC 602. 12. His next limb of argument is based on a violation of Article 14 of the Constitution of India. He pointed out that under paragraph 5A of the Mega Exemption Notification and paragraph 63 of IGST Exemption Notification, the services rendered by specified organisations such as Haj Committees for Haj pilgrimage are wholly exempted. He submitted that the provision of granting exemption from service tax/GST only to Haj pilgrimage organised by the Haj Committees will not stand the test of Article 14 of the Constitution of India. He pointed out that usually, a bilateral agreement between the Government of India and the Kingdom of Saudi Arabia is executed every year. A specific quota of Haj pilgrims is assigned by the Kingdom of Saudi Arabia under the bilateral agreement. Out of the said quota, normally 70% is allotted to Haj Committee, and 30% is allotted to approved HGOs. The selection through Haj Committee is done through a lottery system. He pointed out that there is no difference between the service provided by the Haj Committees and the service provided by HGOs t....
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....country. 15. He relied upon a decision of CESTAT in the case of Cox & Kings India Ltd. v. Commissioner of Service Tax, New Delhi 2014 (35) S.T.R. 817. He submitted that CESTAT has held that the outbound tours abroad are not liable to levy of service tax. He pointed out that the same view is taken by CESTAT in the case of Atlas Tours and Travels Pvt. Ltd. v. Commissioner of Service Tax, Mumbai 2015-TIOL-306-CESTAT-MUM. He pointed out that this Court upheld the said decision. 16. The learned senior counsel submitted that even if it is assumed that Haj is not a religious ceremony but is an event, Rule 6 of the 2012 Rules will apply, which deals with the place of provision of services relating to events. He urged that if the location of the service recipient is outside the taxable territory, service tax cannot be levied. He also invited our attention to provisions of the GST Act and IGST Act, particularly Sections 12 and 13 of the IGST Act. He urged that the said provisions of the IGST Act are pari materia with the 2012 Rules. Relying upon Article 286(1)(b) of the Constitution of India, he submitted that the said provision prohibits the State from imposing GST on the import of goods ....
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....rt held that when tax law operates unequally and which cannot be justified on the basis of any reasonable classification, the law would violate Article 14 of the Constitution. 19. He submitted that the Revenue cannot make such discrimination on the pretext that HGOs operate with a profit motive. He submitted that the said contention has already been negatived by this Court in paragraph 11 and 12 in the case of Rafique Sheikh Bhikan1. 20. The learned senior counsel, further, submitted that only those who are not selected in the lottery drawn by the Haj Committee, have to go to HGOs. Therefore, the act of imposing service tax on those who are compelled to go through HGOs, is highly discriminatory. 21. He invited our attention to the recommendation of the Fitment Committee placed before the GST Council meeting held on 14th March 2020. The first reason set out therein is that if the exemption is allowed for religious pilgrimage, many other domestic and international tours can be considered as religious pilgrimages. Secondly, all religious pilgrimage tours are made taxable except for those which are organized by the Government of India as per the bilateral arrangement. He submitted t....
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.... governing service tax prior to 1st July 2012. Thereafter, he invited our attention to the law as applicable for the period between 1st July 2012 and 30th June 2017. He pointed out the relevant provisions of the 2012 Rules. He invited our attention to Rule 2(h) and submitted that as far as HGOs/PTOs are concerned, they are located within India. Relying upon the definition of 'location of service recipient' in Rule 2(i), he submitted that by virtue of sub-clause (iv) of clause (b) thereof, in the case of the service recipient who is an individual Haj pilgrim, his location will be in India. He pointed out that the decisions of CESTAT relied upon by the petitioners, are for the period prior to 1st July 2012, when earlier service tax regime was in existence. He submitted that as service rendered to Haj pilgrims is not a part of the negative list under Section 66-B of the Finance Act, 1994, it is taxable from 1st July 2012. 26. For the period from 1st July 2017 onwards, he relied upon Section 12(2) of the IGST, which defines 'the place of supply of services' and Section 12(9), which defines 'the place of supply of passenger transportation service'. He submitted that if both the service....
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....ties to enable Haj pilgrims to undertake the Haj pilgrimage. The exemption is to the services rendered only by specified organisations for facilitating religious pilgrimage. 29. While dealing with the argument of violation of Article 14 of the Constitution of India, he submitted that the classification of pilgrims undertaking Haj pilgrimage through the Haj Committee under the bilateral arrangement and those undertaking tours through PTOs is based on an intelligible differentia having rational nexus to the object sought to be achieved by the Statute. He pointed out that service tax exemption granted to the services provided by the specified organisations in respect of religious pilgrimage facilitated by the Government of India under the bilateral arrangement is not discriminatory. He submitted that Haj Committee constitutes a class by itself, which cannot be treated on the same footing as HGOs/PTOs, though services rendered by all of them may be similar. He pointed out that Haj Committee was constituted under Section 3 of the Act of 2002 and State Haj Committees were constituted under Section 17. In view of sub-Section (2) of Section 3, the Haj Committee is a body corporate having ....
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....e present case, Rule 8 will have no application at all. The learned senior counsel submitted that the test of purposive interpretation laid down by this Court in the case of Government of Kerala & Anr. v. Mother Superior Adoration Convent2 will have to be applied. While interpreting the exemption provision, he submitted that the decisions relied upon by the Revenue in the case of M. Jhangir Bhatusha & Ors.13, will not apply to the facts of the case. He pointed out that this was a case where this Court upheld different treatment given to the State Trading Corporation and private importers. He submitted that the differential exemptions were granted after the Government was satisfied that it was necessary in the public interest to pass a special exemption order considering the exceptional circumstances set out therein. CONSIDERATION OF SUBMISSIONS 33. The service tax was introduced by way of the Finance Act. The Finance Act incorporated various services which were made subject to payment of service tax. The services were enumerated in clause 105 of Section 65 of the Finance Act. 34. Service tax is an indirect tax which is leviable on the service provider who is the taxable person. ....
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....Act, the 2012 Rules were enacted and were brought into force with effect from 1st July 2012. 36. In these petitions, we are concerned with HGOs or PTOs. It is, therefore, necessary to understand the nature of services provided by HGOs/ PTOs. Haj pilgrimage is a five-day religious pilgrimage to Mecca and nearby Holy places in Saudi Arabia. As per the Holy Quran, all Muslims who are physically and financially sound must perform the Haj pilgrimage at least once in their lives. As provided in Holy Quran, the Haj pilgrimage is one of the five pillars or duties of Islam. Haj takes place only once a year in the twelfth and final month of Islamic lunar calendar. Pilgrimage undertaken to Mecca at other times is known as Umrah. During the five days of Haj, the pilgrims are required to perform a series of rituals, the details of which are not relevant for deciding the issues involved in these petitions. 37. To enable Haj pilgrims of India to undertake Haj pilgrimage, there is a bilateral agreement executed every year between the Kingdom of Saudi Arabia and the Government of India. As per the bilateral agreement, a quota of number of pilgrims is assigned to India. Out of the said quota, norm....
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..... (i) "location of the service receiver" means:- (a). where the recipient of service has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been obtained; (b). where the recipient of service is not covered under sub-clause (a): (i) the location of his business establishment; or (ii) where services are used at a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or (iii) where services are used at more than one establishment, whether business or fixed, the establishment most directly concerned with the use of the service; and (iv) in the absence of such places, the usual place of residence of the recipient of service. Explanation:- For the purposes of clauses (h) and (i), "usual place of residence" in case of a body corporate means the place where it is incorporated or otherwise legally constituted. Explanation 2:- For the purpose of clause (i), in the case of telecommunication service, the usual place of residence shall be the billing address. "3. Place of provision generally - The place of provision of a service shall be the....
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...., or a financial institution, or a non-banking financial company, to account holders; (b)[x x x] (c) Intermediary services; (d) Service consisting of hiring of all means of transport other than, - (i) aircrafts, and (ii) vessels except yachts upto a period of one month." (emphasis added) We may note here the relevant provisions of IGST Act. Sub-Sections (14) and (15) of Section 2 are as under: "(14) location of the recipient of services means,-- (a) where a supply is received at a place of business for which the registration has been obtained, the location of such place of business; (b) where a supply is received at a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment; (c) where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and (d) in absence of such places, the location of the usual place of residence of the recipient; (15) location of the supplier of services means,-- (a) where a supply is made from ....
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.... or vessel is located or intended to be located outside India, the place of supply shall be the location of the recipient. Explanation.--Where the immovable property or boat or vessel is located in more than one State or Union territory, the supply of services shall be treated as made in each of the respective States or Union territories, in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. (4) The place of supply of restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery shall be the location where the services are actually performed. (5) The place of supply of services in relation to training and performance appraisal to,-- (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the location where the services are actually performed. (6) The place of supply of services provided by way of admission to a cultural, artistic, sporting, scientific, educational....
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....the purposes of this sub-section, the return journey shall be treated as a separate journey, even if the right to passage for onward and return journey is issued at the same time. (10) The place of supply of services on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, shall be the location of the first scheduled point of departure of that conveyance for the journey. (11) The place of supply of telecommunication services including data transfer, broadcasting, cable and direct to home television services to any person shall,- (a) in case of services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna, be the location where the telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services; (b) in case of mobile connection for telecommunication and internet services provided on post-paid basis, be the location of billing address of the recipient of services on the record of the supplier of services; (c) in cases where mobile connection for telecommunication, internet service and direct to home television services are provided on pre-payment bas....
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....es or Union territories identified in the contract or agreement shall be taken as being in each of such States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the amount attributable to services provided by way of dissemination in the respective States or Union territories as may be determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. Section 13. Place of supply of services where location of supplier or location of recipient is outside India - (1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India. (2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services: Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services. (3) The place of suppl....
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....ry, the place of supply of such services shall be taken as being in each of the respective States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. (8) The place of supply of the following services shall be the location of the supplier of services, namely:-- (a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders; (b) intermediary services; (c) services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month. Explanation.--For the purposes of this sub-section, the expression,-- (a) "account" means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account; (b) "banking company" shall have the same meaning as assigned to it under clause (a) of section 45A of the Reserve Bank of India....
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....es is of taxable territory; (g) the location of the fixed land line through which the service is received by the recipient is in the taxable territory. (13) In order to prevent double taxation or non-taxation of the supply of a service, or for the uniform application of rules, the Government shall have the power to notify any description of services or circumstances in which the place of supply shall be the place of effective use and enjoyment of a service." (emphasis added) 39. The provisions of the 2012 Rules and the relevant provisions of IGST Act are to a great extent pari materia. As far as the location of service provider in this case (HGOs) is concerned, there is no dispute that all of them have to be registered under Rule 4 of the Service Tax Rules, 1994 and therefore, as per sub-clause (a) of clause (h) of Rule 2, the location of HGO will be the premises for which registration has been granted to HGO. Such premises are necessarily in India. Even assuming that any other sub-clauses of clause (h) are applicable, the location of the service provider, in this case, will be in India. As far as the location of service receiver under clause (i) of Rule 2 is concerned, in t....
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.... of the service shall be the location of the recipient of service in accordance with Rule 2(i)(b)(iv). Thus, service is rendered by HGOs to the Haj pilgrims within taxable territory. That is how the charging section will apply. 41. There was an attempt made to argue that Haj pilgrimage will be an event covered by Rule 6, which reads thus: "Rule 6. Place of provision of services relating to events.- The Place of provision of services provided by way of admission to, or organization of, a cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, and of services ancillary to such admission, shall be the place where the event is actually held." Religious ceremonies and religious functions are not covered by Rule 6. The words 'similar events' will have to be construed ejusdem generis. Hence, the Haj pilgrimage cannot be an event. 42. Even if we assume that the service rendered by HGOs to Haj pilgrims is transportation service, by virtue of Rule 9 of the 2012 Rules, the place of provision of service will be the location of service provider. In view of sub-Section (10) of Section 12 of the IGST A....
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....or an institution registered under sub clause (v) of clause (23C) of section 10 of the Income-tax Act or a body or an authority covered under clause (23BBA) of section 10 of the Income-tax Act;" substituted vide Notification 40/2016- Service Tax; or (b) conduct of any religious ceremony; 5A. Services by a specified organisation in respect of a religious pilgrimage facilitated by the Ministry of External Affairs of the Government of India, under bilateral arrangement;" (emphasis added) 47. Ex facie, Clause 5A will have no application as it is applicable to services by specified organisations in respect of a religious pilgrimage facilitated by the Ministry of External affairs of the Government of India under bilateral arrangement. The specified organisations have been defined in paragraph 1(1)(a)(zfa) of the Mega Exemption Notification. Specified organisations, as stated therein, are only two categories of organisations. The first one is Kumaon Mandal Vikas Nigam Limited, a Government of Uttarakhand Undertaking and Haj Committee or State Committee under the said Act of 2002. The Haj Committee renders services in relation to the Haj pilgrimage which is facilitated by the Minist....
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....n of certain activities. This case felicitously put the law thus follows : (SCC p. 80, para 16) "16. It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgments emphasise that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal statutes are to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgments at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with e....
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....n the construction of Clause 5, the construction in favour of that which is exempted should be accepted. 51. Now, adverting to sub-clause (b) of Section 5, we find that the exemption has been granted in respect of services by a person by way of conduct of any religious ceremony. Thus, it refers to a person who is naturally the service provider. The sub-Clause (b) applies when the service provider renders service by way of conduct of any religious ceremony. The notification does not say that service provided to the service receiver to enable him to conduct religious ceremony, has been exempted. It only exempts service provided by way of conduct of any religious ceremony. 52. It must be noted here that Clause 5A of the same Mega Exemption Notification grants exemption to the service rendered by Haj Committees in respect of a religious pilgrimage. Thus, the same Mega Exemption Notification makes a clear distinction between 'religious ceremony' and 'religious pilgrimage'. As Haj Committees render services only in respect of Haj pilgrimage, the religious pilgrimage referred to in Clause 5A as regards the Haj Committee, is Haj pilgrimage. Thus, the Mega Exemption Notification exempts t....
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....provider and not to the receiver of service. Even assuming that some services are provided by the Kingdom of Saudi Arabia, the Government of India, Tawafa establishments or Maollims to Haj pilgrims from India, it may be noted here that they are not subjected to payment of service tax. The service tax is levied on HGOs being service providers. The real question is whether HGOs are rendering service by way of conduct of any religious ceremony. As held earlier, HGOs have no role to play in actual conduct of religious ceremonies which are a part of Haj pilgrimage. The service rendered by HGOs is by way of providing air bookings, arranging for the stay of Haj pilgrims in Saudi Arabia, arranging for food while they are in Saudi Arabia, arranging for foreign exchange and arranging registration with Tawafa establishment in the Kingdom of Saudi Arabia. 54. An attempt was made to bifurcate the services rendered by HGOs into two parts. The first part is of the service rendered regarding providing air booking and making available foreign exchange. A submission was made that service tax or GST will be payable on these two items and for the rest of the services rendered, service tax or GST will....
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....ived from HGOs in connection with the Haj pilgrimage falls in the fourth category which lays down that the location of the recipient of service will be the location of usual place of residence of the recipient. Similar are the provisions in GST Act except that the service tax is leviable on services supplied intra-State. Therefore, as far as the services rendered by HGOs are concerned, there is no material change brought about by the GST and the IGST Acts except for the fact that the service tax is chargeable under these two statutes and not under the Finance Act. Thus, the HGOs supply service to the service recipient having location in India. The service is rendered by providing a package for the Haj Pilgrimage to the service recipient who is located in the taxable territory. That is how the service provided by HGOs is taxable for service tax. CONSIDERATION OF THE ISSUE OF DISCRIMINATION 56. The other issue which arises for consideration is about the submissions based on discrimination made under the Mega Exemption Notification between the services rendered by specified organisations and the services rendered by other service providers in respect of religious pilgrimage. 57. Th....
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....ing their stay at the embarkation points in India, while proceeding to or returning from pilgrimage, in all matters including vaccination, inoculation, medical inspection, issue of pilgrim passes and foreign exchange, and to liaise with the local authorities concerned in such matters; (iii) to give relief to pilgrims in distress; (iv) to finalise the annual Haj plan with the approval of the Central Government, and execute the plan, including the arrangements for travel by air or any other means, and to advise in matters relating to accommodations; (v) to approve the budget estimates of the Committee and submit it to the Central Government at least three months before the beginning of the financial year for its concurrence; (vi) to co-ordinate with the Central Government, railways, airways and travel agencies for the purpose of securing travelling facilities for pilgrims; (vii) to generally look after the welfare of the pilgrims; (viii) to publish such proceedings of the Committee and such matters of interest to pilgrims as may be determined by bye-laws made in this behalf by the Committee; (ix) to discharge such other duties in connection with Haj as may be prescribed....
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.... only for the purposes specified under Section 31. The funds can be used only for the purposes of paying salary and allowances to the officers and employees of the Committee and for payment of charges and expenses incidental to the objects specified in Section 9. Other expenditure can be made only with the approval of the Central Government. Therefore, when the Haj Committee facilitates the Haj pilgrims by making arrangements for their visit to the Kingdom of Saudi Arabia for undertaking the Haj pilgrimage, there is a complete absence of profit motive. On the contrary, the money received by the Haj Committee from the Haj pilgrims goes to the statutory fund, which in turn, has to be used inter alia for the benefit of Haj pilgrims. Even the budget of the Haj Committee is required to be submitted to the Central Government. Thus, the Central Government has all pervasive control over the Haj Committee. The State Governments have the same control over the State Committee. On the other hand, there are no onerous duties attached to HGOs. They earn profit by rendering service to Haj pilgrims. Except for the stringent conditions for the registration, the Government has no control over HGOs. ....
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....and-a-half to two months and may then relax comfortably for the rest of the year without any great deal of business from any other source. For the Government of India, on the other hand, the registration of the PTOs, is for the purpose to ensure a comfortable, smooth and trouble-free journey, stay and performance of Haj by the pilgrims going through the PTOs." (emphasis added) In fact, what is observed in paragraph 12 is in the context of the controversy before this Court. It can be seen from paragraph 17 of the said decision that the controversy was about the stringent conditions imposed for the registration of PTOs. The observations in paragraph 12 are in that context. This Court held that the object of putting such stringent conditions is to ensure that proper service is rendered to the Haj pilgrims. In this context, the aforesaid observation has been made that the reasonable profit to PTOs is incidental. It is not the case of the HGOs in these petitions that they are doing any kind of charitable work by providing service to Haj pilgrims. It is not their case that they are not earning any profit while providing a package to Haj pilgrims. They are rendering the services with the....
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....of Notification No.12/2017-CTR and Sl. No. 63 of Notification No. 9/2017-ITR] has been granted only to the pilgrims for whom Haj Committee of India is organizes the Haj/Umrah pilgrimage and not for the pilgrims for whom HGO[PTO] organizes and conducts the pilgrimage. It is discriminatory and violative of Article 14 of the Constitution of India. Services provided by a specified organisation in respect of a religious pilgrimage facilitated by the Government of India, under a bilateral arrangement, is exempt from GST. "Specified organizations" are Kumaon Mandal Vikas Nigam Limited, a Government of Uttarakhand Undertaking and 'Committee' or "State Committee as defined in section 2 of the Haj Committee Act, 2002 (35 of 2002). GST is leviable on tour operator service for organizing Haj/Umrah pilgrimage tour. GST exemption is available only on services of religious pilgrimage facilitated by Central govt or State govt, under a bilateral arrangement. There is no exemption available to services of religious pilgrimage of any religion provided by any private tour operator. Therefore, existing exemption available on services of religious pilgrimage facilitated by Government of India i....
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....existing exemptions from GST. Therefore, the request to not levy GST or to clarify that GST is not leviable on the same is not acceptable. As regards the request for exemption GST on the services of Haj and Umrah tour provided by Haj Group Operators [Private Tour Operators], the same has no merit. The private tour operators supply such services on purely commercial basis to pilgrims who can afford it. GST is an indirect tax. The burden of the tax is not on the suppliers but on the recipients. The service was taxable in Service Tax also. There is no justification for granting a new exemption. Exemptions not only cause loss of revenue but also block input tax credit chain and credit distortions." (emphasis added) The reasons recorded are based on consideration of relevant factors. 63. Strong reliance was placed by the Revenue on the decision of this Court in the Case of M. Jhangir Bhatusha & Ors13. The subject of this petition was an order passed by the Government under sub-Section (2) of Section 25 of the Customs Act, 1962. By the said order, import of the specified oils by the State Trading Corporation was made liable to customs duty at the rate of 5% only and total exemption....
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....orney-General has drawn our attention, and we cannot say that they are not reasonably related to the policy underlying the exemption orders. So that the government would have sufficient supplies of edible at hand in order to feed the market, the learned Attorney-General says, it was considered desirable and in the public interest to reduce the rate of customs duty to 5 per cent on the imports made by the State Trading Corporation. Now it is the Central Government which has to be satisfied, as the authority appointed by Parliament under Section 25(2), that it is necessary in the public interest to make the special orders of exemption. It has set out the reasons which prompted it to pass the orders. In our opinion, the circumstances mentioned in those notifications cannot be said to be irrelevant or unreasonable. It is not for this Court to sit in judgment on the sufficiency of those reasons. The limitations on the jurisdiction of the court in cases where the satisfaction has been entrusted to executive authority to judge the necessity for passing orders is well defined and has been long accepted. 14. It is true that the State dons the robes of a trader when it enters the field of co....