receipts under section 194C by association of oncologists of india

[Satbir singh wahi]

Registered Association of Oncologists of India , has received funds from Medical drugs company for seminar and other charitable work and they have deducted tds u/s 194C of Income tax. The department has given show cause to tax receipts from Medical drugs company under service tax. Kindly guide whether taxable under service tax.

[Amit Agrawal]

With very limited facts shared, it is not possible to give any definitive views.

But, one needs to be look into whether said association had provided by way of sponsorship to corporate / company. And if yes, 100% of service tax was payable under RCM by the corporate / company and not by such association.

Reference: Notification No. 30/2012-Service Tax, dated 20.06.2012 (amended from time to time).

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

*But, one needs to be look into whether said association had provided services by way of sponsorship to corporate / company. And if yes, 100% of service tax was payable under RCM by the corporate / company and not by such association.

[Satbir singh wahi]

Sir

Thanks

The Association is charitable association and does seminar , publish journal and other activities to educate members and society against cancer . The receipts are in general received by association to fund these charitable activities. Please guide

[Amit Agrawal]

One needs to also need to check underlying contracts, documentation etc. But, following pointers may be looked into while looking for potential defenses:

A. Generally speaking, it is likely that said association had provided by way of sponsorship to corporate / company in given scenario. And if yes, 100% of service tax was payable under RCM by the corporate / company and not by such association.

B. Service tax was applicable only if some services were provided for a consideration & not otherwise. For understand this better, attention is invited to Circular No. 127/9/2010-ST (bearing F. No. F. No. 354/314/2017-TRU) dated Dated 16-8-2010.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Shilpi Jain]

If these amounts received are in the nature of donations/contributions then there canbe no liability as there is no service.

Even if these are contributions from members then also on the concept of mutuality no liability should arise in light of the decision of the Calcutta Cub.

So we should be able to demostrate that there is no service provided.

[Satbir singh wahi]

thanks ji . Please give decision of the Calcutta Club.

[Padmanathan KV]

A receipt cannot be taxed under Service Tax merely because TDS is deducted under Income Tax Act. Service tax and Income Tax are two separate and distinct enactments and their provisions operate in two different fields/ areas. Therefore, demand of service tax cannot be madeby relying the 26AS /TDS Statement. [See: M/S. VED SECURITY VERSUS COMMR. OF CENTRAL EXCISE & SERVICE TAX-RANCHI 2019 (6) TMI 383 - CESTAT KOLKATA]

Further, whenever Service tax is demanded on any alleged services, it is the responsibility of the department to show that the assessee had actually rendered such services with positive evidences. [Pls refer SHRESTH LEASING & FINANCE LTD VERSUS C.C.E. & S.T. -SURAT-I 2022 (7) TMI 768 - CESTAT AHMEDABAD].

The above are only guiding beacons and However, the answer to your query will depend upon actual facts and situations and the actual allegation in the SCN along with evidence deduced by Dept if any.

[Shilpi Jain]

You can access the decision at this link

2019 (10) TMI 160 - SUPREME COURT

[Satbir singh wahi]

thanks a lot ji.

[Amit Agrawal]

Referred Apex Court ruling - in case M/s Calcutta Club Ltd. & other - 2019 (10) TMI 160 - SUPREME COURT - will not help assessee in given situation. This is subject to the understanding that Medical drug companies were not the members of said registered association of Oncologists of India.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

AI Summary

Sponsorship as service: reverse-charge may apply if payments confer corporate benefits; donations remain non-taxable.
Whether receipts from medical drug companies to a charitable association are taxable as services turns on whether the payments are for sponsorship or constitute donations/contributions. Sponsorship characterized as a service may attract service tax under the reverse charge mechanism payable by the corporate payer; genuine donations and member contributions and amounts covered by the mutuality doctrine are not services. The Department must provide positive evidence that a service was rendered; TDS entries alone do not establish service-tax liability.