Service tax liability on cooperative societies: member collections may be taxable under the distinct person deeming fiction.
Service tax applies to cooperative societies where member collections constitute consideration for services, because law treats an unincorporated association and its members as distinct persons, creating a deeming fiction that displaces mutuality. Exemptions are limited: a mega exemption covers certain non profit housing society supplies to members within prescribed limits; small service provider threshold relief may apply; pure agent reimbursements can be excluded from taxable value, while common area charges remain taxable. Societies face reverse charge on goods transportation agency payments and may claim CENVAT credit on input services. (AI Summary)