TaxTMI 
TaxTMI 
2018 (10) TMI 35
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....ng of immovable property and in this regard, they have relied on the decision of the Hon'ble High Court of Kerala in W.P. (C.) No. 20728 of 2015 (M); and by this, therefore, the appellant claims that it cannot be classified as a Club/Association. The other common issues involved in the above cases are: I. Interest on instalments, II. Securitization income reflected in the P&L account, III. Rental income, IV. Exchange fees; and V. Revenue from telephone and fax. 2. Canvassing on the above issues, appellant further submitted that the above items would not qualify to be included under the Club or Association up to 01.05.2011. 3. Heard Shri. S. Thirumalai, Advocate along with Shri. Harish Bindumadhavan, Advocate for the appellants and Shri Arjun Raghavendra, DC (AR) and Shri. K. P. Muralidharan, AC (AR) for the Revenue. 4.1 The Ld. Advocates for the appellants submit at the outset that the appellant has already paid service tax on all the amounts collected, i.e., gross amounts collected from its members or customers for the various services provided, which is as per the terms of agreement/contract entered into between the appellant ....
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....crats Pvt. Ltd. [2013 (29) S.T.R. 9 (Del.) for the period prior to 14-5-2015 (2018-VIL-11-SC-ST) II. Securitization Income : (i) The appellant contends that it is a notional income from securitization which is recorded in the Books of Accounts in the year of securitization of audits, as per the Accounting Standard - 9, issued by the Institute of Chartered Accountants of India. (ii) The amount reflected in the appellant's book reflects only the difference between borrowing rate of interest and the rate of interest charged for the purpose of Equated Monthly Instalments (EMIs) for those members who have availed deferred payment facility, (iii) Securitization income does not arise out of any independent transaction between the appellant and its bankers which is shown as in come from securitization per se. (iv) The Ld. Counsel took us through the financials for the year 2009-10 to substantiate their above contentions, more particularly, to the Note No. 4 to the dated financials. (v) The above item is not connected, in any way, as regards any provision of service to its member under Club/Association service. (vi) The above item is ....
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....t. Ltd. [2018-VIL-170-MAD-ST] III. Rental Income : (i) In the nature of business and time share, the appellant does not collect room rentals from its members. (ii) There is no evidence with the Revenue to even indicate that any such rentals were collected from any of the members. On the other hand such rentals are collected only in respect of non-members. (iii) Without prejudice to the above, room rental was brought in as a separate entity under short term accommodation services and, therefore, it cannot be charged up to 01.05.2011. IV. Exchange Services : (i) This relates to services rendered by RCI to the members of the appellant. (ii) There is no separate agreement between RCI and the members of the appellant. (iii) The appellant only facilitates the exchange for its members to avail the services provided by RCI. (iv) The consideration received, therefore, not being in specific entry, is not liable for service tax. V. Telephone and Fax : (i) The facility of providing telephone and fax is not included in the membership fees or the annual subscription fees. (ii) The same is collected separate....
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....ved in relation to club or association service, therefore, is taxable. (iv) The interest on loans alone are excluded from the purview of taxable service under Section 67 and not the interest of this nature. (v) Membership fees cannot be equated with loan facility extended by a bank and therefore, the decisions relied on by the appellant are not relevant. (vi) With regard to telephone and fax revenue, this is also in the nature of 'any other amount' received from its members in relation to facilities or advantages and therefore is taxable. (vii) The appellant is only making available the telecommunication facilities provided by the Telecom Operators which is qualified as a facility or advantage provided to its members by the appellant. (viii) The appellant, having chosen to classify under respective heads to avail the benefit of abatements, which is otherwise not available to a club or association, and therefore the revenue generated under Telephone and Fax from its members is taxable. (ix) With regard to room rentals, the appellant collects additional fees for accommodating additional guests of its members. (x) Even wit....
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.... service provided by them to its members and, therefore, the appellant's submissions with regard to the following of Accounting Standards - 9, is not relevant. (xxi) On the issue of suppression, the Ld. DRs contend that the appellant did not furnish any documentary evidence in support of their submissions. The Schedules in the balance sheet merely showed the income from various sources, but the details of the nature of such income were not shown but which was detected only on the basis of intelligence received. (xxii) Further, the appellant, having registered itself under club or association service, should have included the above items in their taxable value, which the appellant having not done, the same amounts to suppression and, therefore, proviso to Section 73 (1) was invoked, demanding service tax for the extended period of limitation. 6. We have heard both sides, considered the rival contentions, perused the documents placed on record and have gone through the various decisions referred to during the course of hearing. 7.1 We find that there is no difference between a member being upfront and a member availing instalment facility and there is no findi....
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....s of the Ld. DR that the interest on instalment is in the nature of ‚any other amount‛ as defined in Section 65(25aa), we find ourselves not in agreement with the above contentions since ‚any other amount‛ is not an independent entry in the above Section. For the sake of convenience, Section 65 (25aa) is extracted hereinbelow : 65(25aa) "Club or Association" means any person or body of persons providing services, facilities or advantages, primarily to its members, for a subscription or any other amount, but does not include - (i) Any body established or constituted by or under any law for the time being in force; or (ii) Any person or body of persons engaged in the activities of trade unions, promotion of agriculture, horticulture or animal husbandry; or (iii) Any person or body of persons engaged in any activity having objectives which are in the nature of public service and are of a charitable, religious or political nature; or (iv) Any person or body of persons associated with press or media;'] [Emphasis added] 7.4 A perusal of the same makes it clear that the provision of services/facilities or adv....
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....ed that there could be a possibility of rentals being paid by members themselves if they overstay in terms of number of days for which also complete details were not available before the lower authority. It is therefore for the lower authority to give a finding on the above aspects and in this regard, we deem it proper to direct the appellant to furnish all such details that are relevant before the lower authority for the lower authority to arrive at a proper finding after appreciating such documents furnished by the appellant. We, therefore, set aside this issue to the file of adjudicating authority in the above terms. 10. With regard to the Exchange Services offered by the appellant for facilitating its members from availing services of RCI, we find that such facilitation is possible only in respect of members. In other words, the service of facilitation could be availed only by virtue of being a member and not if such person is an outsider. Hence, we find that this activity tantamounts to an activity of service provided to a member under mutuality concept and hence, not taxable, for which we draw support from the the judgments of the Hon'ble High Court of Jharkhand in the cas....