Case Details: Salem District Lorry Owners Associations vs. Commissioner of GST and Central Excise, Salem (2025) 34 Centax 234 (Tri.-Mad)
Judiciary and Counsel Details
- Ms. Sulekha Beevi C.S., Member (J) & Shri Vasa Seshagiri Rao, Member (T)
- Shri S. Sathiyanarayanan, Adv. for the Appellant
- Shri R. Rajaraman, Authorised Representative, for the Respondent
Facts of the Case
The appellant, a registered association, collected subscription and entrance fees from its members. The Department demanded Service Tax on such amounts under Sections 65(25aa) and 65(105)(zzze) of the Finance Act, 1994, under the category of ‘Club or Association service’. The appellant contended that the relationship between a member and its association was governed by the doctrine of mutuality and, therefore, there could not exist a service provider and service recipient relationship. It was submitted that, following the decision of the Supreme Court in State of West Bengal v. Calcutta Club Limited [2019 (29) G.S.T.L. 545 (S.C.)] and the judgment of the Jharkhand High Court in Chief Commissioner v. Ranchi Club Ltd. [2012 (26) S.T.R. 401 (Jhar.)], subscription and entrance fees collected from members were not liable to Service Tax. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
CESTAT held
The CESTAT held that subscription and entrance fees collected by a registered association from its members could not be subjected to levy of Service Tax. The Tribunal observed that the relationship of a member with its association and vice versa was hit by the doctrine of mutuality, and there could not be any service provider and service recipient relationship between them. Following the decision of the Supreme Court in State of West Bengal v. Calcutta Club Limited [2019 (29) G.S.T.L. 545 (S.C.)] and the judgment of the Jharkhand High Court in Chief Commissioner v. Ranchi Club Ltd. [2012 (26) S.T.R. 401 (Jhar.)], it was held that such receipts could not be brought within the ambit of Service Tax under Sections 65(25aa) and 65(105)(zzze) of the Finance Act, 1994.
List Of Cases Cited
- Chief Commissioner v. Ranchi Club Ltd. — 2012 (26) S.T.R. 401 (Jhar.) — Followed [Para 2.1]
- Erode Lorry Owners Association v. Commissioner — Final Order No. 40368/2019, dated 21-2-2019 by CESTAT, Chennai — Followed [Paras 2.1, 5.2]
- Sports Club of Gujarat Ltd. v. Union of India — 2013 (31) S.T.R. 645 (Guj.) — Referred [Para 2.1]
- State of West Bengal v. Calcutta Club Limited — 2019 (29) G.S.T.L. 545 (S.C.) — Followed [Para 5.1]
