2017 (8) TMI 635 - AT - Service Tax

CENVAT credit - Club and association service - input services - case of appellant is that the Karnataka Golf Club Membership fee is related with the business of the company because the club is being used for promoting the business of the company and therefore, the same fall in the definition of input service - Held that - reliance placed in the case of Toyota Kirloskar Motor Pvt Ltd. 2017 (2) TMI 841 - CESTAT BANGALORE , where it was held that Golf Club Membership is not related to the assessee s business and therefore, they are not entitled to the CENVAT credit of service tax paid on club membership of the appellant - appeal dismissed - decided against appellant.

Summary

Issues:
- Availment of CENVAT credit on membership fee for Golf Club
- Eligibility of Golf Club membership fee as an 'input service'

Analysis:
The appeal challenged an order upholding the rejection of CENVAT credit availed by the appellant on a membership fee for a Golf Club. The appellant, a service provider engaged in activities for a client in Hospet, claimed the fee was related to promoting their business. The Commissioner (A) rejected this claim, emphasizing the lack of connection between the Golf Club membership in Bangalore and the appellant's business in Hospet.

The appellant argued that the Golf Club membership fee was linked to their business as the club was used for business promotion. However, the Commissioner (A) found no evidence supporting this claim and highlighted the physical distance between the appellant's business location and the Golf Club. The Commissioner (A) concluded that the membership fee did not qualify as an 'input service' under the relevant provisions.

The Tribunal cited a previous decision in Toyota Kirloskar Motor Pvt Ltd. where it was held that Golf Club Membership is not directly related to the assessee's business, thereby disallowing CENVAT credit on such expenses. Upholding the Commissioner (A)'s order, the Tribunal found no error in the decision and dismissed the appellant's appeal.

In summary, the Tribunal affirmed the rejection of CENVAT credit on the Golf Club membership fee, emphasizing the lack of nexus between the membership expense and the appellant's business activities. The decision underscored the importance of a direct connection between expenses claimed for credit and the services provided by the appellant.