2023 (6) TMI 1326 - AT - Service Tax

Service Tax Not Applicable on Pre-July 2012 Membership Fees for Clubs, Tribunal Rules.

The Tribunal set aside the impugned orders, allowing all appeals with consequential relief, ruling that Service Tax was not leviable on membership fees ... Levy of Service tax - Club or Membership Association Service - advance admissions/enrolment fee collected from the respective Members, who apply for club membership - period June 2005 to September 2011 - HELD THAT:- The Hon’ble Supreme Court analysing the leviability of Service Tax on the Membership fees collected by club or association in the case of STATE OF WEST BENGAL & ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE & ORS. VERSUS M/S. RANCHI CLUB LTD. [2019 (10) TMI 160 - SUPREME COURT] held that Companies and Cooperative Societies which are registered under the respective Acts being constituted bodies under this Acts were not included in the Service Tax prior to 1.7.2012. Thus, the membership fees collected by a registered club or associations is held to be not leviable to service tax. Besides, it is found that this Tribunal in appellant’s own case COMMISSIONER OF CENTRAL TAX, BANGALURU SOUTH COMMISSIONERATE VERSUS M/S KARNATAKA GOLF ASSOCIATION AND M/S. KARNATAKA GOLF ASSOCIATION, BANGALORE VERSUS COMMISSIONER OF SERVICE TAX BANGALORE SERVICE TAX- I [2020 (3) TMI 1098 - CESTAT BANGALORE] decided the issue in favour of the appellant for a different period following the above ratio of the Hon’ble Supreme Court. There are no merit in the impugned orders and the same is set aside - appeal allowed. Issues involved: Leviability of Service Tax on advance entrance/admission fee collected by the appellant under the category of 'Club or Membership Association Service' during the relevant period.Summary:The appeals were filed against Orders-in-Appeal regarding the levy of Service Tax on advance admission fees collected by the appellant from club membership applicants. The appellant, a registered society, contended that a previous Tribunal order in their favor for a specific period had attained finality and the Revenue's current stance was unsustainable. The appellant also argued that as an incorporated body under the Mysore Societies Registration Act, 1960, the levy of Service Tax on membership fees was not applicable, citing relevant legal precedents. The Revenue, through its AR, supported the findings of the learned Commissioner (A).The Tribunal analyzed the issue of Service Tax levy on membership fees collected by clubs or associations, referencing the judgment in the case of Calcutta Club Ltd. The Tribunal noted that registered clubs or associations constituted under specific Acts were not subject to Service Tax before 1st July 2012. Citing the Supreme Court's observation, the Tribunal held that membership fees collected by such registered entities were not liable to Service Tax. Additionally, the Tribunal highlighted a previous decision in favor of the appellant based on the same legal principle.Consequently, the Tribunal found no merit in the impugned orders and set them aside, allowing all appeals with any consequential relief as per the law.(Operative portion of the Order was pronounced in Open Court.)