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2016 (3) TMI 900 - AT - Service TaxDemand of Service tax along with interest on the unpaid portion - Rendering of ‘business support services' and ‘club or association service - Appellant is in receipt of various amounts from its members and other persons for use of sporting, recreational and infrastructural facilities of the club in addition to entrance fees and periodical subscription for the period from April 2005 to September 2009 and sought to be taxed as ‘club or association service' as per section 65(105) (zzze) of Finance Act, 1994- Held that:- in view of the various decisions of Hon'ble Supreme Court, Hon'ble High Court and Tribunal, the demand of tax on receipts from members cannot sustain. Tax under Finance Act, 1994 is not on the entity or on amounts receipts by the entity - it is on specified taxable services and hence taxability can arise only to the extent that each transaction between the member and the club can meet the test of conformity with section 65(105)(zzze) ibid. Therefore, without ascertainment of the receipts as quid pro quo for an identified service, demand of tax on amount transferred from an individual to an entity merely because the individual happens to be a member, on the one hand, and the recipient happens to be club/association on the other, does not meet the test of having rendered taxable service. Also, interest, if any, on delayed payment shall be determined and paid. Penalty under Section 78 ibid is also modified to the amount of tax that is confirmed and penalty under Section 77 ibid is upheld. - Matter disposed of
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