Tax department may review GST exemption for elephants

THIRUVANANTHAPURAM: Essential medicines are taxed. Kerosine used by the poor is charged 5 percent GST. Even recycled plastic sold by ragpickers are taxed at 18 percent. But captive elephants rented out for mammoth charges to temple festivals by rich contractors seem to have escaped the GST net. Commercial Sales Tax joint commissioner Balamurali said that the Department had not yet looked into the issue of taxing elephant business. After consulting his officials, the joint commissioner got back saying that the GST Act had excluded animals. The Act specifically puts bovines, swines, poultry, assess, and mules in the ‘nil’ category. Horses, but, are put in the 12 percent bracket. And then, in a blanket exemption of sorts, it has put “mammals, birds and insects” in the ‘nil’ category.

“Since we have till now not considered the elephant issue, we will assume for the moment that it is in the exempted category,” the joint commissioner said. However, unlike other mammals like cows or swines, elephants are perhaps the only animals employed in a service activity that resembles ‘rent-a-cab’. When this was pointed out, the joint commissioner said: “We will study the issue before taking a concrete stand.” The latest captive elephant rentals put out by Travancore Devaswom Board and Guruvayur Devaswom show that elephants are charged on an average '75,000 for a day. In the case of private contractors, the rentals are even higher but unaccounted. It is unofficially estimated that the ‘elephant-for-hire economy’ is worth '200 crore or more annually.

In fact, steps were taken long before to assess the service tax potential of captive elephants. In 2012, the Central Board of Excise and Customs had issued a preparatory note to all the devaswom boards in the state. The note was then seen as a mandatory step towards including elephant owners within the service tax net. The boards were asked to urgently submit the ‘hire charges’ of various types of elephants. Information was also sought on the number of elephants used in temples under them during the various festivals. The CBEC note has been sent to individual elephant owners, too, in the state. Of the 700-odd captive elephants in the state, 225 are with the devaswoms and the rest with private owners.