TaxTMI 
TaxTMI 
2016 (9) TMI 145
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....ies necessary for the attainment of the foregoing objects of the club. The applicant has already started the process of conversion into a Limited Company because it has the planning to collect the money from its shareholders which shall be utilized for the purposes and object i.e. establishment of a luxurious club. Hence membership shall be granted to only those persons who are shareholders of the company. The part of share subscription is towards equity share capital and remaining towards development contribution fund and will be treated as a deposit in the company. 2. Applicant has raised following question before this Authority; Whether the money/contribution received by company against shares and deposit from the prospective members f....
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....rship fee towards "membership of the club"; that though the proposed company is not providing any services at present against such Share Subscriptions other than issuance of Share Certificates, but in future, it is explicitly intended to provide club service and would clearly be rendering such service; that this is further explicit from the definition of consideration which also covers promised future actions as valid consideration as mentioned in Section 2(d) of Indian Contract Act, 1872, which reads as "When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a con....
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....es received from members from time to time liable for Service Tax. While arriving at above conclusion, it was observed that the term "activity" has very wide connotation and it could be active or passive. Further, it includes provision of a facility provided by the club. In the present case, applicant proposes to provide the services of the club such as restaurant, swimming pool and gymnasium as also to do all incidental activities necessary for the attainment of the objects of the club. Therefore, the contention of the applicant that the proposed service of club to members will not have the element of "activity" and thus, will not fall under the definition of "service", is not tenable. Further, with effect from 01.07.2012, new system of ta....