2023 (10) TMI 495 - AT - Service Tax

Non-payment of service tax - club and association service - Membership Fee and other fee collected from the Members - letting out space for advertisement and hoardings - receiving rental income from the shop leased out for commercial purpose - penalties. Club and association service - HELD THAT - Since there is no dispute that in the present case the Appellant is a club having no shareholders and neither declaring any dividends nor distributing any profits, the same is to be treated as an association of their Members. Respectfully following the decision of the Hon ble Supreme Court in STATE OF WEST BENGAL ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE ORS. VERSUS M/S. RANCHI CLUB LTD. 2019 (10) TMI 160 - SUPREME COURT , the confirmed demand of Rs.16,27,627/- is set aside. Letting out space for advertisement and hoardings - receiving rental income from the shop leased out for commercial purpose - HELD THAT - The Appellant is not able to bring any evidence or case law in his support to argue that the confirmed demands are not legally sustainable. Therefore, their Appeal is rejected in respect of confirmed demand of Rs.1,52,786/- on account of hoarding services and Rs.29,775/- on account of renting of immovable property services. These amounts are required to be paid along with interest. Penalties - HELD THAT - Considering the fact that the entire issue is that of interpretation of applicability or otherwise of the Service Tax on a club, all the penalties are set aside. Appeal disposed off.

Summary

Issues involved: Interpretation of applicability of Service Tax on a club providing services to its members, non-payment of Service Tax on Membership Fee, letting out space for advertisement and hoardings, receiving rental income from a shop leased out for commercial purpose.

Summary:

Membership Fee Service Tax Issue:
The Appellant, a club providing services to its members, was issued a Show Cause Notice for non-payment of Service Tax on the Membership Fee and other fees collected from members. The Lower Authorities confirmed the demands, but the Appellant contended that since services were provided to their own members, it amounted to self-service. Citing the case law of State of West Bengal vs Calcutta Club Ltd, where the Hon'ble Supreme Court held that clubs constituted under respective Acts were not included in the Service Tax net, the Tribunal set aside the confirmed demand of Rs.16,27,627.

Hoarding Services and Rental Income Issue:
Regarding the letting out of space for advertisement and hoardings, and receiving rental income from a shop leased out for commercial purpose, the Appellant failed to provide evidence or case law to support their argument that the confirmed demands were not legally sustainable. Thus, the Tribunal rejected the appeal in respect of the confirmed demand of Rs.1,52,786 for hoarding services and Rs.29,775 for renting of immovable property services, requiring these amounts to be paid along with interest.

Penalties Issue:
Given that the entire issue revolved around the interpretation of the applicability of Service Tax on a club, the Tribunal set aside all penalties imposed. The appeal was disposed of accordingly.