GST Implications for Yoga and Spiritual Wellness Services
This article clarifies the Goods and Services Tax (GST) applicability and rates for yoga, physical, mental, and spiritual wellness services in India. It details how such services fall under the scope of supply, outlines conditions for GST exemptions for charitable institutions, and specifies the HSN code and applicable GST rates. Additionally, the piece examines the availability of Input Tax Credit (ITC) for these services and reviews relevant advance rulings concerning their taxability.
Under GST, services encompassing yoga and various spiritual practices for physical and mental well-being are categorized as services within Chapter 9997. This article examines the Goods and Services Tax implications and applicable rates for such activities.
Inclusion of Wellness Practices in GST Supply Scope
GST defines 'supply' broadly, encompassing sales, exchanges, barters, transfers, leases, rentals, and disposals. Consequently, offering diverse yoga and fitness programs aimed at physical and mental wellness for a fee constitutes a supply under Section 7 of the CGST Act, 2017.
However, Notification No. 12/2017- Central Tax dated 28.06.2017, specifically entry number 80, grants an exemption for yoga, health, and wellness services if two conditions are met:
- The services involve training in recreational activities related to art, culture, and sports.
- The service provider is a charitable institution registered under Section 12AA of the Income Tax Act.
It is important to note that this notification only exempts services considered recreational. If a charitable trust organizes chargeable yoga camps and events, these activities are deemed commercial. Such commercial activities fall under entry number 35 of Notification No. 11/2017- Central Tax dated 28.06.2017 and are subject to an 18% GST rate.
Recreational activities are defined as those undertaken for relaxation, exercise, or pleasure, including examples like cycling, hunting, fishing, rock climbing, outdoor sports, or educational games.
GST Rate and HSN Code for Physical Well-being Services
| HSN | Description of service | SGST | CGST | IGST |
|---|---|---|---|---|
| 999723 | Physical well-being service | 9% | 9% | 18% |
Eligibility for Input Tax Credit
Input Tax Credit (ITC) can only be claimed on goods or services utilized for business purposes. ITC is generally unavailable for:
- Personal consumption.
- Exempted supplies.
- Specific supplies where ITC is explicitly blocked, such as the sale of memberships for health or fitness centers or clubs.
Yoga Services for Corporate Employees:
Expenses incurred by a corporate employer for employee physical or mental wellness, such as yoga services, are not typically mandated by statutory law. While ITC is usually allowed for employee welfare activities that are statutorily required, there is no such legal obligation for employers to provide these specific wellness services. Consequently, ITC cannot be claimed for such expenses.
Key Advance Rulings on Health and Wellness Services
Here are some notable advance rulings concerning health and wellness services:
-
Applicant: M/s. Stonorti Marketplace Private Limited
Facts: This applicant offers various yoga courses for mental and physical wellness but is not registered under Section 12AA of the Income Tax Act, 1961.
Analysis: The courses were provided for a fee, classifying them as commercial activities. Since the institution lacked Section 12AA registration, it did not qualify for the exemption available to charitable institutions.
Conclusion: The yoga courses offered by M/s. Stonorti Marketplace Private Limited are subject to 18% GST.
-
Applicant: M/s. Nimba Nature Cure Village
Facts: This GST-registered applicant provides comprehensive wellness services including Yoga, Naturopathy, Ayurveda, and Meditation, delivered by qualified doctors. They sought GST exemption under entry no. 74 of Notification No. 12/2017- Central Tax dated 28.06.2017.
Entry No. 74 specifically exempts:
- Healthcare services provided by an authorized medical practitioner or paramedics.
- Patient transportation services in an ambulance related to the aforementioned healthcare services.
Analysis: The Advance Authority of Ruling (AAR) observed from the entity’s website that services were offered exclusively on a residential basis, with consideration linked to room type and occupancy. A significant portion of the total charge for therapy was attributed to accommodation. The AAR determined this to be a composite supply, with the accommodation being the principal supply. Therefore, Section 8(a) of the CGST Act would apply.
Conclusion: The Gujarat AAR ruled that since accommodation constituted the major part of the total consideration, these services did not qualify for the exemption specified under entry number 74 of the exemption notification. The services were thus subject to GST.