From Our Bureau
NEW DELHI: The Supreme Court on Tuesday refused exemption for Hajj and Umrah services offered by tour operators to pilgrims travelling to Saudi Arabia.
A Bench of Justices A M Khanwilkar, Abhay S Oka and Jamshed B Pardiwala dismissed a series of petitions filed by the tour operators, headed by the All India Haj & Umrah Tour Organiser Association. It had reserved the judgment on May 5.
Even while dismissing the petitions on both the grounds of exemption and discrimination, the Bench ruled that the issue by the petitioners on the extraterritorial application of GST for services given outside India is kept open since it is pending before another Bench.
The tour operators had moved the top court challenging the levy of GST on Hajis who avail services offered by them. According to the petitioner, no tax law can be applicable to extraterritorial activities as per Article 245 of the Constitution. They also called the levy of tax discriminatory as it exempts certain hajis who undertake the pilgrimage through the Haj Committee of India.
This year is the first time since the COVID-19 outbreak in 2020 that Saudi Arabia has allowed foreign pilgrims to perform Hajj, as the last two seasons were limited only to domestic pilgrims.
In its 78-page ruling, the Supreme Court left open the question of levying GST on services rendered in a foreign country on the request of the parties. It also rejected the claim of discrimination, holding that the Haj Committees, which are not charged GST for the services rendered, do not stand at par with the tour operators who profit from their services.
As regards the grant of exemptions in tax matters, the Court held that ultimately it is a matter of policy in which the court does not interfere. “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,” the Court said, stressing that it hs to show judicial self-restraint in this case.
