2017 (5) TMI 463 - AT - Service Tax

Club or Association Service - whether the various services such as general guidance on the facets of business, representation of members problems and view at local, State and Central Government level, networking and information sharing opportunities, free access to commercial reference library, etc. provided by the appellant to its members, for which they were charging members one time registration fee and also recovering annual subscription from them is liable to be taxed under the head Club or Association Service? - Held that - The issue is no more res integra as the Principal Bench of the Tribunal in the case of Federation of Indian Chambers of Commerce & Industry v. Commissioner of Service Tax, Delhi 2014 (5) TMI 183 - CESTAT NEW DELHI , where it was held that Services provided by the appellants to non-members and the consideration received for rendition of such service, fall outside the scope of the definition of Club or Association service and the taxable service defined in Section 65(25a) read with Section 65(105)(zzze) of the Act, prior to 1-5-2011 - activities undertaken by the Chamber of Commerce have been considered as amounting to public service and of non-chargeable nature - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of services provided by the appellant under 'Club or Association Services' for service tax liability.

Analysis:
The appeal in question was against an Order-in-Original passed by the Commissioner of Central Excise, Pune - III, regarding the classification of services provided by the appellant. The issue revolved around whether the services offered, such as general guidance, representation of members' problems, networking opportunities, and access to a commercial reference library, were classifiable under 'Club or Association Services' for service tax liability. The appellant charged a one-time registration fee and an annual subscription for these services. The adjudicating authority confirmed the demands, interest, and penalties after the appellant contested the show cause notice on various grounds.

Upon hearing the Departmental Representative and reviewing the records, it was noted that the adjudicating authority had held that the fees collected by the appellant were liable to be taxed under the definition of 'Club or Association Service'. The Tribunal referred to a previous judgment involving the Federation of Indian Chambers of Commerce & Industry, where it was concluded that services provided by associations to their members, for consideration, were not exigible to tax due to the principle of mutuality. The Tribunal also highlighted that services provided to non-members fell outside the scope of 'Club or Association Service' for taxation purposes.

Based on the aforementioned judgment and the nature of activities undertaken by the Chamber of Commerce being considered as public service and non-chargeable, the Tribunal held that the impugned order was unsustainable. Consequently, the impugned order was set aside, and the appeal was allowed. The decision was pronounced in court on 07/04/2017.