Service Tax on Society/ Mutual Concern

[Pushkar Gupta]

Dear Sir

It has been registered a Society under Society Registration Act 1860 for mutual benefit of members. It has been contributing a member ship fee in two way one is life membership fee of ₹ 111000 one time and other is general member ship fee ₹ 9000 per month. Member fee is utilized for meeting running expense of society.

Society is formed for mutual benefit of member for acquiring land from contribution of members and build the flat for members from among contribution.

My issue is that is service tax is chargeable on membership fee collected from members. However when service provider and service receiver is same, it is “self service” and whether service tax is chargeable on self service. Service tax is applicable if there is service.

Other issue is that Contributing money in land contribution by members whether it is liable for service tax and no legal documents such as agreement to sales is executed.

Thanks

Pushkar Gupta

AI Summary

Service Tax Applies to Society Membership Fees for Construction Services Under Society Registration Act 1860 A society registered under the Society Registration Act 1860 collects membership fees for mutual benefits, including acquiring land and building flats for members. The query raises whether service tax applies to these fees, considering the concept of 'self-service' when the service provider and receiver are the same. Respondents clarify that the activity involves a contractor providing construction services to the society, thus constituting a taxable service. The fees collected are subject to service tax as they fall under the category of services not exempted by law, with the contractor responsible for tax collection and remittance.