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.

It is observed from the query that Electric Traders association has publishing an diary for distribution to its members/others where the advertisement of its members are published for the consideration. Based on these position, the consideration received is only for the purpose of 'advertisement' and the same is not related to 'service' specifically rendered to its members. Thus in my view, the consideration would not attract service tax under 'club or association service'

[CA AMIT DOSHI]

thnx for reply.. does this consideration will not fall under "facilities or advantages" enjoyed by members. and subject to levy of serice tax?

AI Summary

Advertisement proceeds treated as advertising consideration, not a facility to members, not taxable as club or association service.
Receipts from sale of advertising space in an association's diary constitute consideration for advertisement services to advertisers, not payment for member benefits, and therefore do not, in the absence of a direct service to members, fall within the scope of club or association service subject to service tax.