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2016 (9) TMI 145

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..... Explanation 3 (a) to said Section states that for the purposes of this chapter, an unincorporated association or a body of persons, as the case may be, and a member thereof shall be treated as distinct persons. The money/contribution received by company against shares from the prospective members for raising funds which can be used for achieving the sole object of the company i.e. establishing a luxurious club, is taxable as service as per the provisions of the Finance Act, 1994 - However, refundable security deposit should not be subjected to Service Tax as per provisions of the Finance Act, 1994. - Ruling No. AAR/44/ST-I/ 29 /2016 in Application No. AAR/44/ST-1/10/2016 - - - Dated:- 12-8-2016 - V.S. Sirpurkar, Shri S.S.Rana and S .....

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..... there has to be an activity; b) Second, if there is an activity then it shall be carried out by a person for another person; c) Third, if there is any activity and it is being carried out by a person for another person then there shall be a consideration; that anything or transaction to be covered under the definition of service shall satisfy all the above three things, otherwise it cannot be termed as service; that in the light of the facts of the present case, there is no activity, since receiving an amount against the issuance of shares by a company cannot be said to be against an activity; that if there is no activity then the very first condition remains unsatisfied and hence it cannot connoted at service. 4. Applicant fur .....

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..... ub services; that where a company provides membership only to those persons from whom the company receives the amount in whatever mode of payment, the relationship between the company and members of club, should be considered as service‟ by one person (service provider) to another person (service receiver) for the purpose of Section 65B (44) read with Section 66B, 66D and Section 66E of Finance Act, 1994, therefore, such charges are to be considered as membership fee and such charges received from the members are liable to be Service Tax; that similar issue in case of M/s Emerald Leisures Ltd., Mumbai, as reported in 2016(41) S.T.R. 321(A.A.R.), was decided by the Authority. 6. It is observed that in a similar issue relating to th .....

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..... eof shall be treated as distinct persons. Therefore, deeming provision has been introduced with effect from 01.07.2012 to the effect that the club and members are deemed to be separate persons. Therefore, activity carried out by club for members would be service. 7. Applicant further submits that the word shares fall under the definition of goods, as per Section 65B of the Finance Act, 1994 read with Section 2 (h) of the Securities Contract (Regulation) Act, 1956 and therefore, issuance of shares and getting money from the same cannot be service in any circumstance. It is to be observed that members of the club in lieu of shares would get services which include provision of a facility provided by the club such as restaurant, swimming poo .....

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