Club services not taxable under Finance Act: CESTAT Chennai decision

The Appellate Tribunal CESTAT Chennai ruled in a case concerning the liability of service tax on amounts charged for providing various facilities. The Tribunal, following judgments from the High Courts of Jharkhand and Gujarat, held that services provided by a club to its members are not taxable under the Finance Act, 1994. Consequently, the impugned order confirming the demand for service tax, interest, and penalties was set aside, partially allowing the appeal. However, the appellant's request to avail cenvat credit was rejected.

---

---

Issues: Alleged liability of service tax on amounts charged for providing various facilities. Interpretation of relevant legal provisions.

In this judgment by the Appellate Tribunal CESTAT Chennai, the issue in dispute was the alleged liability of service tax on amounts charged and collected for providing various facilities by the appellants. The Commissioner (Appeals) had modified the adjudication order confirming the demand of &8377; 17,36,984/- with interest and penalties, but set aside the demand in respect of certain services. The appellants appealed this decision. During the hearing, the appellant's counsel argued that all services provided were similar to those provided to members, citing judgments from the Hon'ble Gujarat High Court and the Hon'ble Jharkhand High Court. The respondent reiterated the impugned order. The Tribunal noted the judgments from the Hon'ble High Court of Jharkhand and the Gujarat High Court, which held that services provided by a club to its members are not taxable under the Finance Act, 1994. The Tribunal followed the ratio of these judgments and set aside the impugned order, allowing the appeal to the extent that the remaining demand of service tax, interest, and penalties were not sustained. However, the appeal by the appellant to avail cenvat credit was rejected. The appeal was thus partly allowed based on the above terms.

---