TaxTMI 
TaxTMI 
2023 (6) TMI 460
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....2. 3. It transpires from the records that the appellant is a company incorporated under the provisions of Companies Act, 1956. It claims to be a social club with an object to promote various activities for the members. The appellant claims that the activities are meant exclusively for its members who pay a certain amount to the club at designated intervals of time towards membership fees and other charges connected with the membership. 4. Shri Ayush Mehrotra, learned counsel appearing for the appellant has submitted that the issue involved in the present appeal relating to levy of service tax on membership fee has been settled by the Supreme Court in State of West Bengal Vs Calcutta Club Limited [2019 (29) G.S.T.L. 545 (S.C.)], which decision of the Supreme Court was followed by the Tribunal in Commissioner of Service Tax, Delhi- II Vs. M/s Manufacturers Association For Information Technology [Service Tax Appeal No. 54143 of 2015 dated August 31, 2020; 2020-TIOL-1421-CESTAT-DEL]. 5. Dr. Radhe Tallo, learned authorized representative appearing for the department has however, supported the impugned order and has submitted that it does not call for any interference in this appeal. ....
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....lic service and are of a charitable, religious or political nature; or (iv) any person or body of persons associated with press or media." 12. The taxable service under section 65(105) (zzze) of the Finance Act has also been amended by adding the expression "or any other person' after the expression "to its members' thus widening the tax net to include non-members of club or association as well. 13. With effect from July 1, 2012, "service' has been defined under section 65B (44) of the Finance Act and service tax is leviable on all services as defined except the negative list of services set out in section 66D of the Finance Act. 14. This amendment was explained by the Supreme Court in Union of India and others Vs. Margadarshi Chit Funds Pvt. Ltd. and others [(2017) 13 SCC 806] in the following manner:- "20. Thus, right from 1994 till 2011, the mode adopted was to specify those services on which it was intended to levy service tax. However, Parliament by the Finance Act, 2012 w.e.f. 1-7- 2012 has introduced altogether new system of taxation of services by making a paradigm shift. Now, the scheme of taxation of services is based on negative list of services. Therefore, earlie....
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....o includes the idea of clothing the agreement in a legal form. In the Oxford English Dictionary, Vol. II, at pp. 875 & 876, the word "constitute" is said to mean, inter alia, "to set up, establish, found (an institution, etc.)" and also "to give legal or official form or shape to (an assembly, etc.)". Thus the word in its wider significance, would include both, the idea of creating or establishing, and the idea of giving a legal form to, a partnership. The Bench of the Calcutta High Court in the case of R.C. Mitter and Sons v. CIT [(1955) 28 ITR 698, 704, 705] under examination now, was not, therefore, right in restricting the word "constitute" to mean only "to create", when clearly it could also mean putting a thing in a legal shape. The Bombay High Court, therefore, in the case of Dwarkadas Khetan and Co. v. CIT [(1956) 29 ITR 903, 907] , was right in holding that the section could not be restricted in its application only to a firm which had been created by an instrument of partnership, and that it could reasonably and in conformity with commercial practice, be held to apply to a firm which may have come into existence earlier by an oral agreement, but the terms and conditions o....
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.... Explanation: For the purposes of this section, taxable service includes any taxable service provided or to be provided by any unincorporated association or body of persons to a member thereof, for cash, deferred payment or any other valuable consideration:" 79. It will be noticed that the aforesaid explanation is in substantially the same terms as Article 366(29-A)(e) of the Constitution of India. Earlier in this judgment qua sales tax, we have already held that the expression "body of persons" will not include an incorporated company, nor will it include any other form of incorporation including an incorporated co-operative society. 80. It will be noticed that "club or association" was earlier defined under section 65(25a) and 65(25aa) to mean "any person" or "body of persons" providing service. In these definitions, the expression "body of persons" cannot possibly include persons who are incorporated entities, as such entities have been expressly excluded under section 65(25a)(i) and 65(25aa)(i) as "anybody established or constituted by or under any law for the time being in force". "Body of persons", therefore, would not, within these definitions, include a body constituted....
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....e tax on members' clubs in the incorporated form. 17. It would be seen from the aforesaid judgment of the Supreme Court that 'club or association' was earlier defined under section 65(25a) and 65(25aa) to mean 'any person' or 'body or persons' providing service. The expression 'body of persons' cannot be possibly include persons who are incorporated entities, as such entities have been expressly excluded under sections 65(25a)(i) and 65(25aa)(i) as 'any body established or constituted by or under any law for the time being in force'. 'Body of persons', therefore, would not include a body constituted under any law for the time being in force. Thus, companies and cooperative societies, prior to July 1, 2012, which were registered under respective Acts, would be constituted under those Acts. Incorporated clubs or associations, therefore, prior to July 1, 2012 which were registered under Acts, would be constituted under those Acts. Incorporated clubs or associations, therefore, prior to July 1, 2012 were not included in the service tax net. After July 1, 2012, also the situation does not change for the reason that Explanation 3 uses the same expression. The Supreme Court held that the....