2018 (3) TMI 632 - AT - Service Tax

Club or Association Service - certain service charges and amenity charges collected from their members who used the facilities available in the club either by way of restaurant, accommodation and other ancillary facilities - Held that - There can be no service provider recipient relationship between the club and its members. As such, the tax liability on the consideration received from the members for availing certain facilities in the club premises cannot be taxed under Club or Association Service. Business Support Service - appellant collected fee called licence fee from various bookies who are provided earmarked space in the racecourse to engage in booking on horse races - Held that - the scope of tax entry of BSS will not cover mere renting of office space - Tribunal in the case of Royal Western India Turf Club Ltd Vs CST Mumbai 2012 (11) TMI 526 - CESTAT, MUMBAI held that the activities of the appellants to make available space within the premises of the club by way of stall for a consideration cannot be taxed under BSS. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Liability of service tax on service charges and amenity charges collected from club members.
2. Taxability of license fee collected from bookies under Business Support Service (BSS).

Analysis:
1. The appellant, a club organizing horse races, was facing a tax liability issue concerning service charges and amenity charges collected from its members. The Revenue sought to tax these charges under 'Club or Association Service.' However, the appellant argued that there was no service provider-service recipient relationship between the club and its members. Citing precedents, including decisions from the Tribunal and High Courts, the judges ruled in favor of the appellant. They emphasized that there is no separate entity for service tax levy in a club, and thus, the tax liability on charges from members cannot be imposed under "Club or Association Service."

2. The second issue revolved around the taxability of license fees collected from bookies for providing space at the racecourse. The Revenue contended that these fees should be taxed under Business Support Service (BSS) as the club provided infrastructure support services to the bookies. However, the appellant argued that merely providing space for the bookies' activities did not constitute business support. The judges referred to a similar case where it was held that making space available within the club premises does not fall under BSS. Relying on this precedent and a circular from the Board, the judges concluded that the tax liability on the license fees collected from bookies was not sustainable under BSS.

In conclusion, the appellate tribunal ruled in favor of the appellant on both issues, setting aside the tax liability confirmed in the impugned order. The appeal was allowed with consequential relief, and the Revenue's request for a change of cause title was also granted.