By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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In case there is a change in the view of CBEC regarding taxability, the same shall be applicable from the date when such change took place and was informed to the assessee.
Facts
The appellants provided services relating to meditation, yoga and massage. The department contested the same to be “health and fitness services”. It was contended that the activities of meditation were spiritual in nature. Therefore, the same is not liable to service tax. In 2003, Chief Commissioner, Pune informed CBEC’s view to the appellants that the activities of meditation and yoga would not be taxable. Thereafter, CBEC, on request for clarification by Commissioner, Pune, informed that Service tax was leviable on the said activity. Therefore, even if services are adjudged taxable, tax shall be payable only from the day there is a change in view of the department. However, since the definition of health and fitness centre included meditation specifically, department strongly submitted that the activities were taxable.
Held
Though, the activities of Yoga and Meditation were taxable, since there was a change in view of the highest body of indirect taxes, the same would be applicable only from the date when the change of view took place and informed to the assessee. Therefore, the demand prior to such clarification was set aside.
