The Supreme Court on Friday restrained the Centre from collecting service tax from the Tirumala Tirupati Devasthanam after the managing body of the religious shrine questioned how religious practices including offering of aarti, could be brought under the service tax regime.
A bench of Justices AK Patnaik and FM Ibrahim Kalifulla sought response of Finance Ministry’s Department of Revenue within two weeks. In the meantime, it directed, “no coercive steps should be taken” to levy service tax.
Senior advocate K Parasaran and advocate Sridhar Potaraju, who appeared for the temple trust challenged the constitutional validity of the Finance Act which violated fundamental rights of religious trusts to be run independently since right to practice faith was a fundamental right.
The religious body questioned the jurisdiction of the Finance Ministry and its agencies to apply and levy service tax under the Act as amended from May 1, 2011 on the accommodation provided by the body to pilgrims visiting the holy shrine. Further, the question now to be considered will be whether religious practices could be taxed. The amount in tax could be anywhere beyond Rs 2 crore.