TaxTMI 
TaxTMI 
2024 (12) TMI 1140
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....city, carrying on the business of distillers in the form of alcohol potable or other liquors. The members of appellant paid admission fees/affiliation fees/ Membership fees for becoming the Member of the AIDA. The appellant organizes seminars related to the alcohol industry for members & non-members and charges 'Delegation Fee' for the seminar. Further, there are certain other income such as advertisement in the newsletter for Member, sale of Publications etc. The appellant's records were audited by the department and it was alleged that the appellant had not paid the Service Tax on part of income related to 'Delegation Fee' for the seminar received from members and other income related to advertisement and sale of publication. The department further noted that the amount received for 'Delegation Fee' for seminar/ Seminar receipt collected from members during the period 2007 to 2012, is liable to be covered under Convention Services falls under Section 65(105) and a demand of Rs. 10,82,057/- was proposed against the appellant. However, on other activities like Tour receipts, Circular income, Contribution from News Letter, Advertisement Income, Sale of Publication, the demand of Rs.....
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....upon the following judgments: - • Aravali Construction Company Pvt. Ltd. Vs. Commissioner Of C. Ex., Jaipur- II [2017 (6) G.S.T.L. 347 (Tri. -Del)] • Phoenix Mills Ltd. Vs. Commissioner of Service Tax, Mumbai [2017 (4) G.S.T.L. 146 (Tri. -Mumbai)] Therefore, the services provided by the appellant would be rightly classified under the category of 'Club or Association Services' and not under the 'Convention Services.' Merely because seminars have been conducted by the Appellant, who is very well covered under 'Club or Association Services', cannot be said to be providing Convention Services. On the basis of above submissions, the demand confirmed under the category of 'Convention Services' is not maintainable and is liable to be set aside. 3.1 Learned counsel for the appellant further submitted that the appellant is an association formed on the principle of mutuality and is not a separate and distinct individual while dealing with its members. An association even though a distinct legal entity, is only acting as an agent for its members. The applicant transacts with its members based on principle of Mutuality and therefore, the services provided by the....
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.... sale of goods is chargeable to VAT. Therefore, service tax cannot be demanded on this transaction. He drew attention to the fact that the department while calculating the demand for the subsequent years had deducted the value of 'Sale of Publications" from the taxable value. Therefore, the demand for the period with respect to 'Sale of Publication' and News Letters would not be liable to service tax and the service tax cannot be demanded on Advertisement Receipts. 3.3 Learned counsel further submitted that the appellant is registered with the Registrar of News Paper for India, for printing and circulation of AIDA News Letters to its member which is exempt from Service Tax under clause (iv) of the definition of Club or Association Services. The Appellant is a registered Trade Union under taking the activities of a Trade Union, Exempt under Club or Association Services, also engaged in providing circular and news letter in furtherance of its objects. Trade Union accepts advertisement cost from its members for advertisement and it cannot be termed as Advertising Agency or an advertising consultant. Moreover, the demand in this respect also comes under the principle of ....
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....ticipants/delegates. 4.1 Ld. AR further submitted that the participation in the workshops and consequent availment of the benefits and services offered therein as underlined in workshop in workshop brochures, appear to be restricted for only those who have paid the declared Delegation Fee to the assessee. Therefore, the appellant by holding of seminars and making available the benefits arising thereof to the delegates, has provided such services to delegates and members, which are covered under Section 65 (32) of Finance Act, 1994 read with Section 65 (105) (zc) of the Finance Act, 1994. Ld. AR further contended that the activities of organizing Tours for members, providing additional set of circulars and news letters to members, advertisements in Newsletters and sale of publications to members, undertaken by the appellant are for the furtherance of business and commerce of the members of the association and not for the furtherance of the objectives of a trade union. Therefore, the services provided by the appellant to its members against consideration covered under "Club or Association service" as specified- under Section 65(25a) of the Finance Act, 1994, read with Section 65(1....
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....& Ors. Versus Calcutta Club Limited and Chief Commissioner of Central Excise and Service & Ors., versus m/s. Ranchi Club Ltd [2019 (10) TMI 160 - SUPREME COURT] wherein it was held that the definition of "club or association" contained in Section 65(25a) makes it plain that any person or body of persons providing services for a subscription or any other amount to its members would be within the tax net. However, what is of importance is that anybody "established or constituted" by or under any law for the time being in force, is not included. Consequently, the Hon'ble Supreme Court concluded that companies and cooperative societies and like which are registered under the respective Acts, can certainly be said to be constituted under those Acts, and therefore incorporated clubs or associations constituted prior to 1st July, 2012 are not included in the service tax net. The relevant paras of the said judgment are reproduced hereinafter: "58. ................................ Under Section 65(25a), "club or association" was defined as follows: "club or association" means any person or body of persons providing services, facilities or advantages, for a subscription or any other....
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....rship (vi) a firm, (vii) an association of persons or body of individuals, whether incorporated or not, (viii) Government, (ix) a local authority, or (x) every artificial juridical person, not falling within any of the preceding sub-clauses; xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 71. With this background, it is important now to examine the Finance Act as it obtained, firstly from 16th June, 2005 uptil 1st July, 2012. 72. The definition of "club or association" contained in Section 65(25a) makes it plain that any person or body of persons providing services for a subscription or any other amount to its members would be within the tax net. However, what is of importance is that anybody "established or constituted" by or under any law for the time being in force, is not included. Shri Dhruv Agarwal laid great emphasis on the judgments in DALCO Engineering Private Limited v. Satish Prabhakar Padhye and Ors. Etc. (2010) 4 SCC 378 (in particular paragraphs 10, 14 and 32 thereof) and CIT, Kanpur and Anr. v. Canara Bank (2018) 9 SCC 322 (in particular paragraphs 12 and 17 therein), to....
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....agreements, but which had subsequently been constituted under written deeds." 73. It is, thus, clear that companies and cooperative societies which are registered under the respective Acts, can certainly be said to be constituted under those Acts. This being the case, we accept the argument on behalf of the Respondents that incorporated clubs or associations or prior to 1st July, 2012 were not included in the service tax net. 74. The next question that arises is - was any difference made to this position post 1st July, 2012? 75. It can be seen that the definition of "service" contained in Section 65B(44) is very wide, as meaning any activity carried out by a person for another for consideration. "Person" is defined in Section 65B(37) as including, inter alia, a company, a society and every artificial juridical person not falling in any of the preceding sub-clauses, as also any association of persons or body of individuals whether incorporated or not. 76. What has been stated in the present judgment so far as sales tax is concerned applies on all fours to service tax; as, if the doctrine of agency, trust and mutuality is to be applied qua mem....
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....3 to Section 65B(44), instead of using the expression "person" or the expression "an association of persons or bodies of individuals, whether incorporated or not", uses the expression "a body of persons" when juxtaposed with "an unincorporated association". 82. We have already seen how the expression "body of persons" occurring in the explanation to Section 65 and occurring in Section 65(25a) and (25aa) does not refer to an incorporated company or an incorporated cooperative society. As the same expression has been used in Explanation 3 post-2012 (as opposed to the wide definition of "person" contained in Section 65B(37)), it may be assumed that the legislature has continued with the pre-2012 scheme of not taxing members' clubs when they are in the incorporated form. The expression "body of persons" may subsume within it persons who come together for a common purpose, but cannot possibly include a company or a registered cooperative society. Thus, Explanation 3(a) to Section 65B(44) does not apply to members' clubs which are incorporated. 83. The expression "unincorporated associations" would include persons who join together in some common purpose or common actio....