Service Tax payable on Consideration received under Vanprastha Ashram Scheme by Patanjali Trust

M/s. Patanjali Yogpeeth Trust Vs C.C.E. (CESTAT Delhi)

Now coming to the demand qua the donations received by the appellant under one of its Scheme called Vanprastha Ashram Scheme, it is held that under this scheme the appellant was leasing the accommodation to all those who are interested to visit the appellant premises till their life time on payment of certain amount ranging from Rs.5,00,000/- to 21,00,000/-. By making such payments, such person does not become the member of the Trust as such, but become the lease-holder for a particular accommodation respective to the price paid by him under the Scheme. This observation is sufficient to hold that such person become the shareholders of the appellant’sScheme but not the members of the Trust. Such members cannot be cloth with the status as that of founder members of the Trust and the element of mutuality therefore, is missing in such a relationship. The transaction with such members will be the one with some other person with no principle of mutuality involved. As such, the Trust and the member of Vanprastha Ashram Scheme become two different legal entities. Any services of club and association being provided by the appellant to such members are therefore, taxable services under Section 65 (25a) and are absolutely out of the scope of Sport Club (supra) decision. Hence we are of the opinion that The Adjudicating authority below has rightly confirmed the said demand.

In the present case, the members of Vanprastha Ashram Scheme are not member of the Patanjali Trust, the appellant herein, but are the members under particular scheme of the said Trust for the only purpose of being leased out a residential accommodation for their life time. The said leasing, to our opinion, is not ancillary and incidental object to the main charitable object of the appellant Trust. No doubt the members of Vanprastha Ashram Scheme are also getting that accommodation for attending the Yoga Camps but the fact is apparent and admitted that Yoga Camps can still be attended by any member of the appellant Trust irrespective of the being the member of Vanprastha Ashram Scheme. Hence, the consideration received as lease money under this scheme by the appellant is a consideration not because of mutuality between the appellant and the members of the said scheme, as discussed above, but is purely commercial in nature. Hence, for this particular consideration the benefit of exemption for appellant being charitable in nature cannot be granted. The said consideration is taxable under 65 (25AA) of the Act and the demand therefore is held to have been rightly confirmed.

FULL TEXT OF THE CESTAT JUDGMENT

Present is an appeal against the Order-in-Original dated 7/11^th November, 2013. The fact of the case is that the appellant are alleged to be engaged in the activity of providing various taxable services in respect of which they have neither taken registration nor the Service Tax with the intention to evade the same. After conducting basic investigation, show cause notice dated 18^th October, 2012 was served upon the appellant raising a demand of Rs.5,14,54,521/- Service Tax for rendering the taxable service of Club and Association while receiving subscriptions in the form of Donations qua the Membership and service tax for the amount received for leasing the cottages under Swami Sankaradev Vanprastha Ashram Scheme, for rendering the renting of immovable property service and also with respect to intellectual property service. The said demand has been confirmed vide the order under challenge. Resultantly, the present appeal.

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