While setting aside the order passed by Commissioner of Central GST and Central Excise, the Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) held that department cannot levy Service Tax on amounts received by the Appellant for providing ‘club or association service’ and also on ‘convention service’ when it does not retain any amount.
The Department had issued two notices to M/s Indian Pharmaceutical Association, for the period from 2006-07 to 2009-10 and for 2010-11, for seeking recovery of ₹ 46,35,019 and ₹ 7,13,157 respectively, along with applicable interest and imposition of penalty. The demand was in the nature of Service Tax against the amounts received from members for providing ‘club or association service’ and ‘convention service’.
Aggrieved by the order that upheld the above demand of the Department, the Appellant has approached before this Tribunal.
The Tribunal has accepted the contentions of Appellant and thus relied upon the decision of Hon’ble High Court of Jharkhand in Ranchi Club v. Chief Commissioner of Central Excise & Service Tax, Ranchi Zone and Hon’ble High Court of Gujarat in Sports Club of Gujarat Ltd v. Union of India. In these cases, it has been held that in view of the mutuality and in view of the activities of the club, if club provides any service to its members in any form, then it is not a service by one to another since foundational facts of existence of two legal entities in such transaction is missing.
The Court observed that thus any demand in relation to service tax for providing ‘club or association service’ is without any authority of law.
The CESTAT bench comprising of members C. J. Mathew and Ajay Sharma has also observed that the appellant does not offer ‘convention services’ but gets events organized by professionals and, the collected fees are wholly transmitted to such organizers. Thus, the Tribunal has held that the activity is beyond the purview of taxability under section 65 (105) (zc) of the Finance Act, 1994.Subscribe Taxscan AdFree to view the Judgment