Alumni fee and Service Tax: no tax liability where the institution rendered no service for the collection.

Amounts collected from students as alumni fee were held not to attract Service Tax because the institution rendered no service in return for the collection. The fee was only towards supporting an alumni association to maintain contact between former students and the institution, and the absence of any service element meant the statutory requirement of consideration for a taxable service was not met. The Service Tax demand was therefore unsustainable and the impugned order was liable to be set aside.

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Issues: Whether the amount collected from students as alumni fee was liable to Service Tax as consideration for a taxable service.

Analysis: The collection was made for supporting an alumni association formed to maintain the bond between former students and the institution. The record disclosed that no service was rendered by the institution in return for the amount collected. Service Tax is attracted only where a service is provided for consideration, and in the absence of any service element, the levy could not be sustained.

Conclusion: The demand of Service Tax on the alumni fee was unsustainable and the impugned order was liable to be set aside in favour of the appellant.

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