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2023 (6) TMI 460 - AT - Service TaxLevy of Service Tax - club and association services - activity undertaken by the appellant in collecting membership fee from its members - whether service tax can be levied on activities undertaken by a club for its members for membership fee? - period involved in the present appeal is post negative list i.e. post 01.07.2012. HELD THAT:- With effect from July 1, 2012, “service’ has been defined under section 65B (44) of the Finance Act and service tax is leviable on all services as defined except the negative list of services set out in section 66D of the Finance Act - This amendment was explained by the Supreme Court in Union of India and others Vs. Margadarshi Chit Funds Pvt. Ltd. and others [2017 (7) TMI 224 - SUPREME COURT] holding that each individual service on which tax was levied (known as taxable service) was defined. Secondly, the definition of “service” given now contains a negative list which is contained in Section 66-D of the Act. In other words, it specifically excludes certain transactions from the ambit of service. Thus, those transactions which are specifically excluded are not liable for service tax. Any other kind of service which qualifies the definition of “service” contained in the Act would be exigible to service tax. The Supreme Court in Calcutta Club Ltd. [2019 (10) TMI 160 - SUPREME COURT] examined the definition of “club or association’ as contained in section 65(25a) of the Finance Act from June 16, 2005 up to July 1, 2012 holding that incorporated clubs or associations or prior to 1st July, 2012 were not included in the service tax net. It would be seen from the judgment of the Supreme Court that ‘club or association’ was earlier defined under section 65(25a) and 65(25aa) to mean ‘any person’ or ‘body or persons’ providing service. The expression ‘body of persons’ cannot be possibly include persons who are incorporated entities, as such entities have been expressly excluded under sections 65(25a)(i) and 65(25aa)(i) as ‘any body established or constituted by or under any law for the time being in force’. ‘Body of persons’, therefore, would not include a body constituted under any law for the time being in force. Thus, companies and cooperative societies, prior to July 1, 2012, which were registered under respective Acts, would be constituted under those Acts. Incorporated clubs or associations, therefore, prior to July 1, 2012 which were registered under Acts, would be constituted under those Acts. Incorporated clubs or associations, therefore, prior to July 1, 2012 were not included in the service tax net. After July 1, 2012, also the situation does not change for the reason that Explanation 3 uses the same expression. The confirmation of demand by the Commissioner by order dated 09.01.2017 deserves to be set aside and is set aside - Appeal allowed.
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