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TMI Blog2024 (12) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... r Haj and Umrah confirmed, while allowing the small scale exemption - there are no merits in the impugned order and set aside the same. Appeal filed by the revenue is allowed. - MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) AND MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Shri A.K. Choudhary, Authorised Representative for the Appellant Mohammad Irshad, Advocate for the Respondent ORDER This appeal directed by the revenue against Order-in-Appeal No.217/ST/Alld/2019 dated 31/10/2019 passed by Commissioner (Appeals) Central Excise CGST, Allahabad. By the impugned order following has been held:- I have gone through the case record. Demand of service tax amounting to Ra 6609447/- was confirmed on account of tour operator service in respect of Haj and Umra. In this regard, Hon'ble Tribunal Allahabad vide Final Order No. 70767/2019 dated 10.4.2019, in the case of NATIONAL TOUR TRAVELS AGENCY, Rampur, has held that out bound tours for Haj Umrah are not liable to service tax. The appellant has contended that Commissioner (Appeals)Meerut, vide O-I-A No MRT/EXCUS/000/APPL-MRT/41 42/2019-20 dated 22.5.2019 has also held similarly in the case of FAIZ TRAVELS, Meerut. The said order of Commissioner ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Sub Section (1) (a), (b), (c) (i) (i) (i), (d), (e), 77(2) of Section 77 Section 78 of the Finance Act, 1944 for the reasons discussed hereinabove. 2.2 The matter was adjudicated as per the Order-in-Original No.10/JC/ST/2018-19 dated 15.02.2019 by holding as follows:- ORDER (1) I confirm the demand of Service Tax amounting to Rs. 67,67,516/- (Rs. Sixty Seven Lacs Sixty Seven Thousand Five Hundred Sixteen only) and order for recovery from M/s. M/s Chishti Travel Tour, 88/185, Chaman Ganj, Kanpur, under the provisions of Section 73 (1) of the Finance Act 1994 read with Section 174 of the Central Goods Service Tax Act 2017. (2) I also demand interest from them, payable under Section 75 of the Finance Act 1994 at the applicable rate, on the amount of Service Tax confirmed at (1) above read with Section 174 of the Central Goods Service Tax Act 2017. (3) I impose a penalty of Rs. 10,000/- (Rs. Ten Thousand only) upon M/s Chishti Travel Tour, 88/185, Chaman Ganj, Kanpur, under the provisions of Section 77(1)(b), (c), (d), (e) 2 of the Finance Act 1994 as amended read with Section 174 of the Central Goods Service Tax Act 2017 for the reasons discussed above. (4) I impose a pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority has observed as follows:- DISCSSION AND FINDINGS 42. I have gone through the facts of the case as detailed in the show cause notice, relied upon documents, defence of the party as well as their submissions during the course of personal hearing. Accordingly I proceed as hereunder in the case: 43. I find that I have to consider the following issues while finalizing the show cause notice under reference i. Whether the demand of Service tax amounting to Rs. 67,67,516.00 (Rs Sixty Seven Lacs sixty seven Thousand five Hundred Sixteen only) is sustainable and be not confirmed and recovered under the provisions of Section 73(1) of the Finance Act, 1994 read with Section 174 of the Central Goods Service Tax Act 2017. ii. Whether the Interest be not demanded and recovered from them on the short payment of Service Tax under the provisions of Section 75 of the Finance Act, 1994 read with Section 174 of the Central Goods Service Tax Act 2017 for the period. starting from the due date of payment till the actual payment of Service Tax on appropriate rates. iii. Whether Penalty not be imposed upon them under the provisions of sub Section (1) (a), (b), (c) (i)(ii) (iii), (d), (e) (2) of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e referred to above and taxability of the Services viz. Income for sale of Air Tickets covered under Air travel agent services , Commission from western Union Commission on Air/Rail Tickets covered under Business Auxiliary Service Legal Expenses under Reverse charge Mechanism therefore, I am of the confident opinion that the details reported under different heads under different table are true and correct and are very much chargeable to service tax as proposed in the show cause notice under reference. 49. Now I have observed that the major part of the demand raised through the show cause notice under reference relate to the tour operator services performed during the relevant period by the party, Mis Chishti Travel Tour, 88/185, Chaman Ganj, Kanpur in their defence dated 03.05.2018 has claimed that such tour are related to Huj and Umrah Tours also called as lesser pilgrimage or Umrah which are exempted from Service Tax. In this support they have referred to Notification No 25/2012- ST (S.No. 5) wherein to conduct any religious Ceremony is exempted. 50. I have examined the issue relating to Tour operator Service for the pilgrimage/Umrah/to conduct any religious Ceremony as referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through HCOI or SHC Private tour operators conducting Haj Yatra will not be eligible for exemption from payment of Service Tax as notification specifically provided exemption to tour organized through Haj Committee and State Committee 57. While scrutinizing the show cause notice/ relied upon documents and the defence reply submitted to the show cause notice under reference, I have no where found any evidence put forth by the party in support of the provisions applicable during the relevant period. In the absence of any of the ingredients, I am of the definite opinion that M/s Chishti Travel Tour, 88/185, Chaman Ganj, Kanpur had been simply a tour operators and they have no relevancy with the Haj Pilgrimage or Umrah as claimed by them in their defence and accordingly the demand is sustainable and required to be confirmed. 58. It is also on records that at no point of time M/s Chishti Travel Tour, 88/185, Chaman Ganj, Kanpur have claimed the deduction with supportive evidences and therefore the request in this regard is not sustainable at the same time CENVAT Facilities had been. available to them which they have failed to claim during the relevant period. 59. Further with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the imposition of penalty is mandatory under the provisions of Section 11AC of the Act It has also been held that where the statue provides for penalty for failure or default of statutory or civil obligations provided under the Act and Regulations framed there under, mens-rea is not essential element for imposing penalty. In this context I further refer to the judgment passed by Punjab Haryana High Court in the case of CCE, Delhi III vs Machino Montell (1) Ltd (2006(07)LCX0133] wherein it has been held that the question whether penalty is to be levied or not depends on the fact whether the non- payment of duty was on account of fraud, collusion or any willful misstatement or suppression of facts or contravention of any of the provisions of this Act or the rules made there under with intent to evade payment of duty. Thus, I hold that for this act, the party had rendered themselves liable to penal action under Section 78 of the Finance Act, 1994. Accordingly same is imposable upon them. 63. In the instant case, element of suppression of facts as well as deliberate evasion of Service Tax by the party have got proved as discussed in above paras. Therefore, I am of the view penalties u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The levy of interest is geared to actual amount of tax withheld and the extent of delay in paying the tax on due date essentially, is compensatory and different from penalty- which is penal in character. Liability to pay interest is founded on doctrine of compensation, but penal interest is an extraordinary liability incurred by a debtor on account of his being a wrong does. 66. From the above, it is clear that interest is liable to be recovered from the party a appropriate rates under the provisions of Section 75 of the finance Act 1994, on the amount of Service Tax being confirmed. Accordingly, I hold so. 4.3 We find that the basic issue for consideration in the present appeal is with regards to levy of service tax on the services of Tour Operator provided for Haj and Umrah. The issue with regards to levy of service tax in respect of these services for the period post introduction of Negative List concept for levy of service tax (i.e. from 01.07.2012) is no longer res-integra and has been decided by Hon ble Supreme Court in the case of All India Haj Umrah Tour Organizer Association Mumbai [2022 (63) GSTL 129 (SC)], wherein following has been held:- CONSIDERATION OF SUBMISSIONS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole of India except Jammu and Kashmir. Section 66C confers rule-making power on the Central Government for determination of the place where such services are provided or deemed to have been provided or agreed to be provided or deemed to have been agreed to be provided. By exercising the power under Section 66C of the Finance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the location of such establishment; or (iii) where services are provided from more than one establishment, whether business or fixed, the establishment most directly concerned with the provision of the service; and (iv) in the absence of such places, the usual place of residence of the service provider. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in the taxable territory, shall be the location of the recipient of service. 9. Place of provision of specified services.-The place of provision of following services shall be the location of the service provider:- (a) Services provided by a banking company, 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 direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located: Provided that if the location of the immovable property or boat 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 loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assage, the place of supply of such service shall be determined in accordance with the provisions of sub-section (2). Explanation. For 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 mob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government, a State Government, a statutory body or a local authority meant for the States 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 pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-section (5) are supplied in more than one State or Union territory, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices 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 this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Act, the place o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 Ministry of External Affairs of the Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 each other because they relate to two different set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the two specified organisations that render services in respect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices 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 not be payable as the services rendered are outside the taxable territory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegory 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. The submission of the petitioners is that there is no difference between the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom 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 by the Central Government. (2) The Central Government shall afford all reasonable assistance to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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. 59. Shri Gopal Sankarnarayanan, the learned senior counsel relied upon certain observations made by thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess 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 object of earning profit. 60. Thus, the Haj Committee is a statutory committee which is entrusted with various fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 is not discriminatory. The legislature intends to exclude private tour operators from the purview of Service Tax/GST exemption. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 from auxiliary and additional duty was granted. On the other hand, import of the same specified oils by private importers was made liable to customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 commercial activity, and ordinarily it can claim no favoured treatment. But there may be clear and good reason for making a departure. Viewed in the backg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ildering conflict of the experts, and the number of times the judges have been overruled by events - self-limitation can be seen to be the path to judicial wisdom and institutional prestige and stability. The Court must always remember that legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry . (Emphasis added) In the matter of grant of exemptions in tax matters, latitude has to be given to the decision making. Ultimately, it is also a matter of policy. We have already held that there is a rational basis for classifying specified organisations as a class and keeping out the Private Tour Operators from exemption under Clause 5A. We will have to show judicial self-restraint in this case. 65. Hence, we are of the considered view that the arguments based on discrimination have no substance at all, as HGOs and the Haj Committees do not stand on par and in fact, the Haj Committees constitute a separate class by themselves, which is based on a rational classificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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