Thread by @lawbarandbench

#SupremeCourt is hearing a plea seeking #GST and Service Tax exemption for #Hajj Pilgrimage

Bench led by J Khanwilkar: Exemption should be asked for by recipient?

Sr Adv Arvind Datar: Qs is, is Hajj a religious ceremony or not? They have taken stand saying it's commerical activity, no exemption for Badrinath etc

Datar: Point is Hajj is a complex ritual involving non commerical Activities as well

Khanwilkar: Which ritual is simple?
Adv: Kerala marriages are said to be so.

Datar: GST council taken that view (of no Exemption to Hajj), grossly wrong and needs to be set aside.
Please come to page 8-9 of my submission.

"Hajj is religious has also been affirmed by this court, 2-judge Bench"

[Reads describing the Hajj process & distinction w Umrah)

Datar: In Tirupati, GST only on accommodation, not on laddoo or procession. No obligation on Hindus to go there (Kashi etc), but in Islam Hajj is so

Adv: Let's not get into that

J Khanwilkar: Yes, comparison can draw into debate evreything. Being rationalist part of being Hindu

Datar: Hajj diff nature of ceremonies completely. Lordships come to page 224, before going into Wikipedia ...

[Reads from document about pillars of Islam and rituals of Hajj]

Supreme Court notes that one can be termed not a Hajji if not done well: Datar

Datar: Will now quote from Wikipedia since it is simple and makes life easy ... Page 21 of written submissions on pillars of Islam

J Khanwilkar: To reach place of worship, that cannot be termed conduct of the religious ceremony towards exemption. Anything done here in India ... So far as conduct of rituals it'll have to be done there, does exemption for religious activities apply throughout? The answer is NO

J Khanwilkar: Once you reach there, no service tax on expenses. Traveling from here has to be outside exemption, tax exemptions related to that.

Datar: Hajj expenses include airfare, hotel stay. Once in Saudi, belongings kept separately etc

BENCH: From there it starts ...

Datar: Some wear their dresses here too ... We're on larger question, paying service tax and spending money for Pilgrimage. Remaining non-airfare and stay is out of commerical activity and into religious ceremony.

Our SC a Muslim judge said Hajj subsidy is wrong

Datar: Money paid to Tawaffah has to be exempt. Rest my lords are right. Service tax on commercial activity, then why levied here?

K Khanwilkar: That's very loosely put. Service tax for charges towards conduct of such activities.

Datar: levied on service portion, what dey say

Datar: is it's levied on gross consideration. Humbly submit we may defeat object if department goes into where it starts for purpose of interpretation.

Khanwilkar: Has to be legal principle not concession.

Bench: What is your role wrt conduct of religious ceremony? You're only providing services for the pilgrims.

Datar: I apply to Hajj committee, India has quota, or option of more expensive HGO
Services by person by way of conducting of religious ceremony ...

BENCH: 'by way of'

Khanwilkar: Petitioners are tour operators or pilgrims?

Datar: That should not be relevant in indirect tax matter. He (tour operators) has to pay 18% collecting payment from pilgrim

Datar: Considertn being paid for religious ceremony, ought not to be taxed. Tirupati sevas eg - persons in that includes juristic entities.
Friend tells me in Hajj, Hajji has to do it himself
J Khanwilkar: No concept of Yajman like other religion, where you can have vakalatnama

Datar: Let's get to how do we classify services.

J Khanwilkar: those in 70% quota no tax on them?

Datar: Yes as per Bilateral Treaty

J Khanwilkar: Everything exempted?
Datar: Only tax on airfare
Khanwilkar: Bilateral se kya farak parna hain? On What basis distinction made?

Datar: I'll complete Pilgrimage here first.

J Oka: That one is not so rigid

Datar explains terms of the bilateral agreement b/w India and Saudi Arabia.

Khanwilkar: For them who's the tour operator?
Datar: Hajj Committee.

Datar reiterates Hajj subsidy judgment.

Khanwilkar: Separate notification for the govt quota?
Counsel: Yes

Datar: Distinction made between pilgrimage and ceremony.

J Khanwilkar: Where such distinction made?

J Khanwilkar: You're saying in the process this Distinction amounts to discrimination?

Datar: Yes, as if i go by private i have to pay tax.

J Ravikumar: Permissible goi to do Hajj for someone else

Bench discusses with advocates if this is only for the deceased as per submissions

[Datar reads from his submissions as to Hajj rituals]

Datar stresses that Hajj is obligatory when one can afford it themselves

J Khanwilkar: Hajj is a religious ceremony we accept even without these submissions.

J Khanwilkar: Distinction is there so that those going for personal and private Pilgrimage are not exempt. Only when it begins will be exempt.

State Counsel points out all key parts tax exempt.

Datar: My only claim is don't charge me for what I pay to Tawaffah, as in service tax for conversion charges. Page 183

Bench: Of what? You have to help us.

State Counsel: Key is it says 'in respect' of towards Exemption for religious pilgrimages

Counsel: Cannot rewrite notification to get exemption.

Datar: Sure. but must not lose Object of act. Person who conducts ceremony is not taxed, i pay for clients travel etc but pay service tax without distinction

J Khanwilkar: Religious ceremony is religious neutral.

Datar: can we lose sight of fact that Muslims from here have to pay service tax?

[Reads from submissions]

Bench; So Distinction made between tour operators and group providers?

Datar; Yes. [Explains from submissions]

Datar: I'm also highly regulated, but treated differently from those availing 70% quota.

Bench: End consideration being Hajj, you're saying exception is being being taken from you but not them?
Bench : Yes

Sr Adv Gopal Sankarayan: Here with brief submissions.
Bench: We thought time to travel, and you're here with visa documents.

Sr Adv Gopal: Bilateral agreement covers everything, including the 70-30 division.

Sr Adv Gopal: Hajj Committee Act wide enough to define pilgrim as Muslim going to or coming from Hajj, no distinction on mode of travel viz govt quota or pvt

Sr Adv Gopal: 2013 judgment says Amicus had stated that airfare by HGO higher than that of pvt operators, yet global tender not possible because of bilateral treaty.

Sr Adv Gopal reads to say Current notifications create classifications.

J Khanwilkar: What are you doing? Telling us to read one thing and saying it's in another volume?

Sr Adv Gopal reads from note

J Khanwilkar: This court has said tour operators are organisers.

So far as other religions concerned, how do you make distinction on Exemption?

Gopal: They will apply ...

J Khanwilkar: But to apply there's no limit, how will tax authorities go about it?

Sr Adv Gopal: [In notifications] They've applied the Gopalan test, but as per RC Cooper you have to look at effect of law.

J Khanwilkar: We thought of concluding today. You plan on keeping us busy till Atleast 4 it appears.

Sr Adv Gopal argues that annorder says govt cannot exempt only some Scheduled Tribes from income tax as unreasonable

One more counsel appearing for a pilgrim:

J Khanwilkar: Aaj Wednesday hain? (to others in Bench)

Counsel reads from a representation made earlier

Counsel: Essentially my contention is Hajji being charged differentially based on operator

Counsel: Hajj Committee not being levied GST, after 2019 most quotas for Govt.
Later on 25k additional quota was added after Prince's visit, on 10-15k private govt division. That was given on condition that pvt operators will take Hajjis at applicable rates.

Counsel: but only pvt to tax.

J Khanwilkar: Don't know whether we'll be able to finish tomorrow also as we have to hear other side. This will clash with part-heard matter tomorrow.

Counsel: We'll stop today.