In a recent ruling, the Delhi High Court exempted the Indian Medical Association from the Service tax net.
While dismissing the appeal filed by the Customs Excise & Service Tax Appellate Tribunal (CESTAT), the Delhi High Court validated that any incorporated clubs or associations or prior to 1st July 2020 are not included in the service tax net.
The appeal was filed challenging the final order dated 4th June 2018 passed by the Customs Excise & Service Tax Appellate Tribunal(CESTAT) in Appeal No. 52555/2014 filed by the Indian Medical Association (respondent), whereby the appeal of the respondent was allowed and the demand of Service Tax as proposed against the respondent was dropped.
The Tribunal while passing the impugned order had relied upon the decision of High Court of Gujarat in Sports Club of Gujarat (2013) and also the judgment of High Court of Jharkhand in the case of Ranchi Club 2012 (Jharkhand).
Relying on the judgments of High Courts of Gujarat and Jharkhand were challenged before the Apex Court by the Chief Commissioner of Central Excise and Services. The Apex Court by way of its detailed judgment in State of West Bengal & Ors. vs. Calcutta Club Limited has affirmed the judgments of the High Court of Gujarat and Jharkhand.
The division bench comprising of Justice Manmohan and Justice Sanjeev Narula held that “It is, thus, clear that companies and cooperative societies which are registered under the respective Acts, can certainly be said to be constituted under those Acts. This being the case, we accept the argument on behalf of the Respondents that incorporated clubs or associations or prior to 1st July 2012 were not included in the service tax net.”Subscribe Taxscan AdFree to view the Judgment