Yoga, Physical, Mental and Spiritual Practices- Taxability under GST

Services by yoga and spiritual activities for physical and mental wellness are considered service under GST and covered under Chapter 9997. Let us discuss the applicability of GST on such services and the rates applicable.

Whether these fall under the scope of supply under GST?

GST has given an inclusive definition to the word ‘supply’. It includes sales, exchange, barter, transfer, lease, rental and disposal. Thus, providing various yoga and fitness courses for physical and mental well-being in exchange for consideration is considered as supply as per Section 7 of the CGST Act, 2017.  

But, entry number 80 of Notification No. 12/2017- Central Tax dated 28.06.2017 exempts the service provided for yoga, health and wellness if the below two conditions are met:

1. The services are offered by training in recreational activities related to art, culture and sports. 
2. It is a charitable institution registered under Section 12AA of the Income Tax Act. 

Point to be noted: This notification only exempts services provided for recreational activities. If a charitable trust is conducting chargeable yoga camps and events, the same will be considered a commercial activity. It will get covered under entry number 35 of the Notification No. 11/2017- Central Tax dated 28.06.2017 and charged at 18%. 

*Recreational activity means any activity undertaken for relaxation, exercise or pleasure. Some examples are cycling, hunting, fishing, rock climbing, any outdoor sports activity, or any educational game or activity. 

GST rate and HSN code

HSN	Description of service	SGST	CGST	IGST
999723	Physical well-being service	9%	9%	18%

Availability of input tax credit

Input tax credit (ITC) can be claimed on goods or services used only for business purposes. It is not available on goods or services used for

• Personal use
• Exempt supplies
• Supplies on which ITC is specifically not available- ITC is not available on the sale of membership in a health or fitness centre or club.

Yoga service availed by Corporate employer for its employees’ physical/ mental wellness:

Such expenses are not incurred as per any statutory requirement under any Law. ITC is available on employee welfare activities if the employer must provide such service. As there is no such statutory requirement on the part employer to provide such service, ITC cannot be claimed.

Advance rulings

Here are some of the advance rulings regarding health and wellness services:

• Applicant: M/s. Stonorti Marketplace Private Limited

Facts: The applicant (Stonorti Marketplace Private Limited) provides various yoga courses for mental and physical wellness. It is not registered under section 12AA of the Income Tax Act, 1961.

Analysis: In this case, the various courses were provided against a consideration. Thus, it will be considered a commercial activity. Also, it is not covered under the exemption provided to charitable institutions as it is not registered under section 12AA of the Income Tax Act, 1961.

Conclusion: The courses are chargeable to GST at 18%.

• Applicant: M/s. Nimba Nature Cure Village

Facts: The applicant is registered under GST and offers various wellness facilities such as Yoga, Naturopathy, Ayurveda and Meditation. Such services are offered with the help of qualified doctors. It claimed exemption from GST as per entry no. 74 of Notification No. 12/2017- Central Tax dated 28.06.2017.

Entry No. 74 exempts services provided by way of

1. Health care services by an authorised medical practitioner or paramedics.
2. Transportation services of a patient in an ambulance for the service mentioned above.

Analysis: The Advance Authority of Ruling examined from the entity’s website that it is providing such services only on a residential basis. Also, the consideration is based on the type of room and its occupancy. Further, the charge taken for the room consists of the major part of the entire consideration taken for the therapy. These services are jointly provided in the normal course of business. AAR held this as a composite supply, and thus such services would be charged as per section 8(a) of the CGST Act. 

Conclusion: Gujarat AAR held that the accommodation charge formed the major part of the total consideration. Thus such services are not exempt from exemption specified under entry number 74 of the exemption notification.