2017 (7) TMI 802 - AT - Service Tax

Subscription fee - taxability - case of the department is that the appellant is liable to pay service tax on the subscription fee, annual subscription rate of monthly/annual publications for magazines etc. and value of medical treatment books - whether subscription from the members of the forum is chargeable to service tax under the service of club and association service? - Held that - This issue in the appellant s own case Sakal Papers Ltd. Versus Commissioner of Central Excise 2015 (8) TMI 1396 - CESTAT MUMBAI , has been decided by this Tribunal, where it was held that rendering of services by the club to its members is not taxable under the category of Club or Association Service - the members subscription received by the forum is not chargeable to service tax - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Whether subscription fees from members of a forum are liable for service tax under the category of club and association services.

Analysis:
The case involved the appellant, a company engaged in publishing regional newspapers and running exclusive forums for women and families. The Department contended that the appellant should pay service tax on various subscription fees related to publications, medical treatment books, and exclusive forum memberships. The Commissioner (Appeals) upheld the demands.

Legal Arguments:
The appellant's counsel argued that a Division Bench of the Tribunal had previously ruled in the appellant's favor on a similar issue, citing judgments in cases of Ranchi Club Ltd. and Sports Club of Gujarat Ltd. where service tax on club subscriptions was deemed not chargeable. The High Court had also struck down relevant provisions of the Finance Act, 1994.

Tribunal's Decision:
Upon considering the submissions, the Tribunal noted that the issue of service tax on forum membership subscriptions had been previously decided in the appellant's favor by the Tribunal itself. Referring to the earlier order, the Tribunal found that the High Courts of Jharkhand and Gujarat had ruled against taxing club services, leading to the conclusion that the impugned order demanding service tax was not sustainable.

Conclusion:
Based on the precedent set in the appellant's own case and the legal principles established by the High Courts, the Tribunal set aside the impugned order and allowed the appeals, determining that the subscription fees from forum members were not liable for service tax. The judgment was pronounced on 07/07/2017.