2015 (10) TMI 2361 - AT - Service Tax

Tribunal Overturns Service Tax on Bank Association Collections

The Tribunal set aside the Order-in-Original confirming service tax liability on amounts collected by an association of banks from its members for various ... Liability of Service Tax – Club or Association Service or Convention Services – Charge Subscription and Empanelment Fees - Appellant contends that services rendered would not fall under category of taxable services as members cannot be categorised as clients to whom services are provided – Held That:- Services rendered by appellant are for their own member banks and are more or less in consonance with Rules of appellant as published – Impugned order is unsustainable and set aside – Decision made in case of Federation of Indian Chambers of Commerce and Industry, M/s Electronic and Computer Software Export Promotion Council Versus CST, Delhi [2014 (5) TMI 183 - CESTAT NEW DELHI] followed – Decided in favour of appellant. Issues Involved:Whether the appellant is liable to discharge service tax liability on amounts collected as subscription, fees, and charges for conducting conferences and seminars for its members or otherwise.Analysis:1. The appeal was against an Order-in-Original passed by the Commissioner of Service Tax I, Mumbai, confirming the demand raised on the appellant for 'Club and Association Services' and 'Convention Services', along with penalties under Section 77 and 78 of the Finance Act, 1994.2. The appellant, an association of various banks, provides services like organizing meetings, intervening in court cases, issuing newsletters, negotiating wages, and charging subscription and processing fees. The revenue authorities considered these amounts taxable under 'Club and Association Services' and 'Convention Services'.3. The counsel argued that the services provided by the appellant do not fall under taxable services, citing precedents where similar associations were held not liable for service tax as the members cannot be categorized as clients to whom services are provided.4. The Departmental Representative supported the adjudicating authority's findings.5. The main issue was whether the appellant is liable for service tax on amounts collected from members for various activities.6. The appellant is an association of banks providing services to its members, and the services rendered are in line with the association's rules.7. The Tribunal disagreed with the adjudicating authority's findings, stating that the services rendered by the appellant to its members do not fall under 'Club and Association Services'. Citing precedents, the Tribunal held that services provided to members are not taxable under 'Club or Association' services.8. The Tribunal referenced a case involving FICCI and ECSEPC, where it was held that services provided to members are not taxable under 'Club or Association' services. Another case involving Matunga Gymkhana supported the same view, citing judgments from the High Courts of Jharkhand and Gujarat.9. Considering the judicial pronouncements and precedents, the Tribunal set aside the impugned order, allowing the appeal with consequential relief.This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both sides, and the Tribunal's reasoning based on legal precedents and interpretations to arrive at the decision to set aside the impugned order and allow the appeal.