Is Tirupati Balaji liable to pay Service Tax? Supreme Court to decide
IS GOD liable to pay Service Tax for the services He provides to his pilgrims? Lord Balaji at Tirumala is perhaps the richest God on Earth providing emotional bliss to millions of devotees. Tirumala Tirupati Devasthanams (TTD), the Trust that manages the huge temple administration provides a lot of facilities to the pilgrims - of course for a charge and the Service Tax department naturally wants Service Tax on these charges.
TTD has recently challenged the provisions of the Finance Act, 1994 requiring it to pay Service Tax as violative of Constitution Articles 26 (freedom to manage religious affairs), 27 (freedom as to payment of taxes for promotion of any particular religion), and 14 (right to equality).
The petition came up for hearing before the Supreme Court on Friday. The Supreme Court issued notice to the Central Government and restrained the Service Tax authorities from coercive recovery of tax dues.
TTD had earlier challenged the imposition of Service Tax on the accommodation service provided by it, but the Andhra Pradesh High Court dismissed the writ petition []. Now, the Supreme Court will decide the issue.
Is Prasad excisable ? More than twenty years ago, the CESTAT ruled, a manufactured item should have a market and it should be sold. Sale implies a bargain and there is profitability and gain attached to it. There are no religious sentiments and the item is purchased by one and all. In the light of the intendment of the legislature to impose duty on goods which are brought to the market for sale the items 'Prasad' or 'Prasadam' cannot be considered as goods. The mere entry 'Prasad' or 'Prasadam' which is purely a religious offering made to the deity cannot be brought within the ambit of the Act. The mere specification in the tariff schedule will not make the item goods and exigible; merely because the devotee has purchased it from the temple precincts it cannot be considered as an exigible commodity. The item may be goods before they are taken for presentation to the deity and at that stage the excisability of the product could be considered. The said item before presentation to the deity would not be 'Prasad' or 'Prasadam' but it would be known in the stage in which it is. Therefore, the item, after it is presented to the deity by the temple authorities and offered to devotees on charges, cannot be considered as 'goods'. The term 'goods' as has been noted in the definitions, does not carry any religious sentiments nor does it have any blessings of deity. Goods are commodities which are brought to the market for sale, while the 'Prasad' or 'Prasadam' are the blessings of a deity which has a great religious significance. Therefore, in my opinion 'Prasad' or 'Prasadam' cannot be made exigible.”