CA Raman Singla
Good news for Baba Ramdev…!!!
Will yoga classes carried by charitable institutions for consideration be chargeable to service tax?
Charitable trusts organise yoga camps or other fitness camps and they generally are not free for participants, as trusts charge some amount from the participants in the name of accommodation or participation. As donation is received for participation, it will be considered commercial activity and it will definitely be covered under the service tax net.
As per entry 4 of Mega Exemption Notification 25/2012 Dated 20.06.2012, any service by way of charitable activities by an entity registered under section 12AA of the Income tax Act, 1961 is exempt from service tax. Till 20th Oct’ 2015, the charitable activities did not include the yoga within its ambit. Consequently, the activity of arranging yoga and meditation camp by charitable trusts was chargeable to service tax.
W.e.f. 21st Oct’ 2015, the Modi Government has amended the aforesaid definition of “charitable activity” vide Notification No 20/2015 – ST and include the word “Yoga” within its ambit.
Thus, w.e.f. 21st Oct’ 2015, if trusts are arranging residential or non-residential yoga camps by receiving donation or other charges from the participants, these will be considered under charitable activities and accordingly not liable to be taxed.
It is pertinent to note that the entity must be registered under section 12AA of the Income tax Act, 1961 in order to claim the exemption.
Stay Tuned. We’ll keep you updated.
Warm Regards
CA Raman Singla
Partner - Indirect Tax Professionals
Author - Simplified Approach to - SERVICE TAX
Devalya Advisory LLP
Web: www.indirecttaxprofessionals.com
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