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2017 (7) TMI 224 - SC - Service TaxNature of activity of "chit fund business" - cash management / fund management - whether classifiable under the category of "banking and other financial services" - admittedly upto June 14, 2007, chit fund business was not exigible to service tax. Likewise, from July 01, 2012 to June 14, 2015, no service tax was payable. Present dispute concerns the intervening period from June 15, 2007 to June 30, 2012 - It has been brought specifically within the definition of service by the aforesaid amendment which takes effect from June 15, 2015. Therefore, there is no dispute that w.e.f. June 15, 2015, service tax is payable on chit fund. Held that:- whenever a person is having idle cash or unrealised dues and wants the same to be utilised in a proper and fruitful manner, managing the said idle cash would amount to cash management. These are the services generally offered by the banking institutions to their clients. - Cash management, thus, deals with optimisation of cash as an asset and for this purpose various decisions are to be taken for proper management thereof. The cash management schemes are, thus, built around two goals: (a) to provide cash needed to meet the obligations and (b) to minimise the idle cash held by the business. When we understand the aforesaid concept of cash management, the answer we are seeking becomes obvious. Insofar as activity of chit fund is concerned, it does not amount to cash management. Once we have held that chit fund business is not cash management or a business of managing cash, no further discussion on this issue is even required. However, dehors the issue of cash management, we are of the view that activity of managing chit fund does not amount to management of any type of fund. Even as per the definition from dictionary relied upon by the Revenue, fund is an aggregation or deposit of resources from which supplies are or may be drawn for carrying on any work, or for maintaining existence. For our reasons given above, we affirm the conclusion in the impugned judgment of the Andhra Pradesh High Court [2008 (7) TMI 227 - HIGH COURT ANDHRA PRADESH]. We also hold that Kerala High Court [2013 (6) TMI 53 - KERALA HIGH COURT] has taken erroneous view and its judgment stands overruled. As a result, these appeals are dismissed. No service tax was payable on Chit Fund activity From June 15, 2007 to June 30, 2012 - Decided in favor of assessee.
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