Applicability of service tax - facilities or advantages

[CA AMIT DOSHI]

An electric traders association has been registered under club or association category. They have collected money from against advertisement in diaries and credited the proceeds to P & L a/c. The cost of such diaries have been debited separately. Can this proceeds recd from advertisement in diaries be subject to service tax as 'facilities or advantages' enjoyed by members in lieu of payment made to association by these members.

AI Summary

Electric Traders' Ad Revenue Not Subject to Service Tax; Classified Outside 'Facilities or Advantages' for Members An electric traders association, registered under the club or association category, collected money from advertisements in diaries, crediting the proceeds to their profit and loss account. The query raised was whether these proceeds are subject to service tax as 'facilities or advantages' provided to members. One response clarified that the consideration received is solely for advertisement purposes and not for services rendered to members, thus not attracting service tax under 'club or association service.' A follow-up questioned whether these proceeds could be classified as 'facilities or advantages' subject to service tax.