GST on Yoga & Wellness Services

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.

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

Eligibility for Input Tax Credit

Input Tax Credit (ITC) can only be claimed on goods or services used 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:

1. Healthcare services provided by an authorized medical practitioner or paramedics.
2. 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.

FAQs on GST for Yoga & Wellness Services

• Are yoga classes exempt from GST?
  Only when provided by a charitable institution registered under Section 12AA of the Income Tax Act as a recreational service (Notification 12/2017, entry 80). Commercial yoga is taxable.
• What GST rate applies to commercial yoga and fitness?
  18% (9% CGST + 9% SGST) under HSN 999723 for physical well-being services.
• Are chargeable yoga camps by a charitable trust exempt?
  No. If a charitable trust runs paid yoga camps or events, these are treated as commercial and taxed at 18% under Notification 11/2017, entry 35.
• Which HSN/SAC code covers yoga services?
  Yoga and wellness fall under Chapter 9997; physical well-being services use HSN 999723.
• Can a yoga studio claim Input Tax Credit?
  ITC is available only on goods and services used for business purposes; it cannot be claimed on personal consumption or exempt supplies.