AI Drafter 
TaxTMI 
TaxTMI 
2021 (4) TMI 1112
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....n fees and infrastructure development fund which is used for the purposes of provision of services and goods and a reading room, library, chambers for accommodating family and guests, a bar and sports facilities. In addition to the subscription fees at the time of admission of the member to the Applicant, an admission fee as an infrastructure development fund is collected. In addition, the applicant outsources catering services who supply foods and beverages and run a super market within the premise of the applicant. These facilities are only available for use by the members. These outsourced agencies charge GST on their supplies of food, beverages and sale of goods to members. The applicant bears the cost of such goods and services from the subscription fees paid by the members. The applicant receives contribution from its members as under: * Subscription fees from members * One time admission fees from members (in the form of Infrastructure Development Fund) at the time of membership admission. In view of the above, the applicant sought advance ruling on the following questions: i. Whether amount collected as membership subscription fees paid b....
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.... • Impossibility of profits being derived by such contributions made by Members. 3. APPLICANT'S INTREPRETATION OF LAW: 3.1 It is submitted that as per clause 59 of the bye laws, the applicant club can be dissolved in as per the procedure laid down in Section 22 of the Karnataka Societies Registration Act. Section 22 of the Karnataka Societies Registration Act reads as under:- 22. Provision for dissolution of societies and adjustment of their affairs.- Any number not less than three fourths of the members of any society may determine that it shall be dissolved and thereupon it shall be dissolved forthwith, or at the time then agreed upon, and all necessary steps shall be taken for the disposal and settlement of the property of the society, its claims and liabilities, according to the rules of the said society applicable thereto, if any, and if there are no such rules, as the governing body shall find expedient, provided that, in the event of any dispute arising among the said governing body or the members of the society, the adjustment of its affairs shall be referred to the principal court of original civil jurisdiction of the district in which the reg....
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....9;s Indian Association reported in (1970) 1 SCC 462 ; interpreting similar provisions of the Madras General Sales Tax Act, 1959, which had tried to rope in members-clubs held that :- "Thus in spite of the definition contained in Section 2(n) read with Explanation I of the Act if there is no transfer of property from one to another there is no sale which would be eligible to tax." 3.4 The Hon'ble Jharkhand High court in case of Ranchi Club Ltd. v. Chief Commissioner [2012] 26 S.T.R. 401 (Jhar.) examined the concept of mutuality in the contest of levy of Service tax under the earlier Finance Act 1994. The Hon'ble High Court accepted the contention of petitioner and held as under : "It is true that sale and service are two different and distinct transactions. The sale entails transfer of property whereas in service, there is no transfer of property. However, the basic feature common in both transactions requires existence of the two parties: in the matter of sale, the seller and buyer, and in the matter of service, service provider and service receiver. Since the issue whether there are two persons or two legal entity in the activities of the members' club....
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....w specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 6. We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made by Sri. Manian, Advocate and Duly Authorized Representative of the applicant during the personal hearing. We also considered the issues involved, on which advance rulings are sought by the applicant, relevant facts and the applicant's interpretation of law. 7. We observe that the Hon'ble Supreme Court judgment in the case of M/s. Calcutta Club Limited [AIR 2019 SC 5310] is fully applicable on the applicant. We also observe that Section 108 of Finance Act 2021 brought in a retrospective amendment in Section 7 of CGST Act, 2017, which is reproduced below: 108. Amendment of section 7. In the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the Central Goods and Services Tax Act), in section 7, in sub-section (1), after clause (a), the following clause shall be inserted and shall be ....