Appellant club wins on Membership Fee, but loses on hoarding & rental income Service Tax. Penalties overturned.

The Tribunal ruled in favor of the Appellant club in the Service Tax case related to Membership Fee, citing precedent that clubs were not subject to Service Tax. However, the Tribunal upheld the demands for non-payment of Service Tax on hoarding services and rental income, as the Appellant failed to provide sufficient evidence or legal support. Penalties imposed were set aside, and the appeal was disposed of with the Appellant being required to pay the confirmed demands for hoarding and rental services along with interest.

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Issues involved: Interpretation of applicability of Service Tax on a club providing services to its members, non-payment of Service Tax on Membership Fee, letting out space for advertisement and hoardings, receiving rental income from a shop leased out for commercial purpose.

Summary:

Membership Fee Service Tax Issue:
The Appellant, a club providing services to its members, was issued a Show Cause Notice for non-payment of Service Tax on the Membership Fee and other fees collected from members. The Lower Authorities confirmed the demands, but the Appellant contended that since services were provided to their own members, it amounted to self-service. Citing the case law of State of West Bengal vs Calcutta Club Ltd, where the Hon'ble Supreme Court held that clubs constituted under respective Acts were not included in the Service Tax net, the Tribunal set aside the confirmed demand of Rs.16,27,627.

Hoarding Services and Rental Income Issue:
Regarding the letting out of space for advertisement and hoardings, and receiving rental income from a shop leased out for commercial purpose, the Appellant failed to provide evidence or case law to support their argument that the confirmed demands were not legally sustainable. Thus, the Tribunal rejected the appeal in respect of the confirmed demand of Rs.1,52,786 for hoarding services and Rs.29,775 for renting of immovable property services, requiring these amounts to be paid along with interest.

Penalties Issue:
Given that the entire issue revolved around the interpretation of the applicability of Service Tax on a club, the Tribunal set aside all penalties imposed. The appeal was disposed of accordingly.

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