2019 (11) TMI 298 - AT - Service Tax

Financial aid from government makes Club/Association Service for waste treatment exempt under Finance Act.

The Appellate Tribunal CESTAT AHMEDABAD ruled that the Club or Association Service for effluent and solid waste treatment is exempted under Section 145 of ... Exemption form payment of service tax - Club and Association Service for the purpose of treatment of effluent - exemption by virtue of Section 145 of Finance Act 2012 - financial assistance sanctioned by Government of Gujarat in the Ministry of Industry - HELD THAT:- The Club and Association Service for the purpose of treatment of effluent has been exempted by Section 145 of Finance Act, 2012 - the Club or Association Service set up for a project for treatment and recycling of effluents and solid wastes is exempted subject to condition that the same is set up with the Financial assistance by the Central Government or a State Government. As per the sanction letter dated 09.09.2010 issued by the Industry Commissionerate, it is clear that the project was financially assisted by the State Government of Gujarat. The Service is clearly exempted under Section 145 - appeal allowed - decided in favor of appellant. Issues:- Appellant being an industry association for effluent and solid waste treatment- Demand of Service Tax under Club or Association Service- Exemption under Section 145 of Finance Act, 2012- Financial assistance by Government of Gujarat for the projectAnalysis:The judgment by the Appellate Tribunal CESTAT AHMEDABAD involved the issue of the appellant, an industry association engaged in the treatment and recycling of effluents and solid wastes, facing a demand for Service Tax under the Club or Association Service as per sub-clause (zzze) of clause (105) of Section 65. The appellant argued for exemption under Section 145 of the Finance Act, 2012, citing that the service falls under the exemption provided by this section. The appellant's counsel highlighted that the financial assistance for the project was sanctioned by the Government of Gujarat, meeting the conditions specified in Section 145. Reference was made to a previous decision by the Tribunal in a similar case. On the other hand, the Revenue, represented by the Assistant Commissioner, reiterated the findings of the impugned order.Upon hearing both sides and examining the records, the Tribunal noted that the Club and Association Service for effluent treatment is indeed exempted under Section 145 of the Finance Act, 2012. The section validates the exemption for club or association services related to projects, including those for effluent treatment, provided financial assistance is received from the Central or State Government. The Tribunal observed that the project in question had received financial assistance from the State Government of Gujarat, as evidenced by the sanction letter from the Industry Commissionerate dated 09.09.2010. Consequently, the Tribunal concluded that the service in question is clearly exempted under Section 145, leading to the setting aside of the impugned order and allowing the appeal.In summary, the judgment clarified that the Club or Association Service for effluent and solid waste treatment is exempted under Section 145 of the Finance Act, 2012 when set up with financial assistance from the Central or State Government. The decision underscores the importance of meeting the specified conditions for exemption and the relevance of documentary evidence to support claims of exemption under the law.