2016 (2) TMI 26 - AT - Service Tax

Club Membership of Indian Banks - taxability - association established in 1947 of various banks as its Members and provides various activity to the member banks like organising meetings with Finance Minister, Chief Executives of various banks, intervening in court cases and representing the banking industry, issuing periodical newsletter/bulletin, giving publicity, negotiates wages between the employees union and banks. Held that - his bench in the case of Matunga Gymkhana - 2015 (1) TMI 1146 - CESTAT MUMBAI has held the same view that any association is not providing services to its own members and the bench relied upon the judgment of the Hon ble High Court of Jharkhand in the case of Ranchi Club vs. Chief Commissioner of Central Excise & Service Tax, Ranchi - 2012 (6) TMI 636 - Jharkhand High Court and also the judgment of the Honble High Court of Gujarat in the case of Sports Club of Gujarat vs. Union of India - 2013 (7) TMI 510 - GUJARAT HIGH COURT - Demand set aside - Decided in favor of assessee.

Summary

Issues:
1. Whether the appellant is liable to discharge service tax liability on the amounts collected as subscription, fees, and charges for conducting conferences and seminars.

Analysis:
1. The appeal was against an Order-in-Original passed by the Commissioner of Service Tax I, Mumbai, confirming demands on the appellant for Club and Association Services and Convention Services, along with penalties under Section 77 and 78 of the Finance Act, 1994.

2. The appellant, an association of banks, charged its member banks for various activities like organizing meetings, intervening in court cases, and issuing newsletters. The revenue authorities claimed these charges were taxable. The appellant argued that services provided did not fall under taxable services, citing precedents like Indian Chambers of Commerce and Industry vs. Commissioner of Service Tax.

3. The Tribunal considered whether the appellant was liable for service tax on amounts collected from members. It was established that the appellant provided services to its member banks, as per the Rules of the Indian Banks Association, and all banks in India were its members.

4. The adjudicating authority's findings were challenged, arguing that the services were for members, not charitable, and the fees were shown as income. The Tribunal disagreed, citing a similar case involving Federation of Indian Chamber of Commerce and Industry, where it was held that services to members were not taxable under Club or Association services.

5. Referring to the judgment in another case, the Tribunal held that services to members were not taxable under Club or Association services. They also cited the Matunga Gymkhana case, supporting the view that associations providing services to their members were not liable for service tax.

6. Based on the precedents and legal analysis, the Tribunal concluded that the impugned order was unsustainable and set it aside, allowing the appeal with any consequential relief. The judgment highlighted the principle of mutuality and the exclusion of services to members from the scope of taxable services under Club or Association services.

This detailed analysis of the judgment showcases the legal reasoning and precedents considered by the Tribunal in reaching its decision on the issues raised in the appeal.