Page 112 - GSTL_16 April 2020_Vol 35_Part 3

326 GST LAW TIMES [ Vol. 35
(f) an association of persons or a body of individuals, whether in-
corporated or not, In India or otherwise;
………………..
However, as per the said definition, there is no deeming fiction to
treat association and its members as different persons. Hence the
key condition to tax a transaction u/s. 7(1)(a) and to treat it as a
supply, the supplier and recipient must be different, is not satisfied.
Hence the transaction of providing services by an association to its
members cannot be taxed u/s. 7(1)(a).
(l) Under Service tax there was a deeming fiction under Clause (a) to
Explanation 3 to Section 65B which provided that an unincorpo-
rated association or body of persons, as the case may be and mem-
ber thereof shall be treated as distinct persons. Such deeming fiction
is not provided under the GST Regime.
(m) In spite of the said deeming fiction the Honourable Supreme Court
has dismissed the revenue appeal and held that services provided
by associations to members is not liable to Sales Tax/Service Tax on
grounds of mutuality.
Hence in the absence of any mechanism to treat the appellant and its members as
separate persons the said service does not tantamount to supply u/s 7 of the
CGST Act, 2017, GST is not leviable on membership fees collected by the appel-
lant from its members.
42. Ground No 2 : Assuming (but not admitting) and without prejudice
to above grounds, if your honor holds membership fees charged from members is
taxable supply liable to GST, then appellant should be entitled to claim ITC in
respect of banquet and catering services :
(a) Appellant reiterates the submissions made on Pages 13 to 15 of the
Appeal Memo.
(b) Further it can be observed from the invoices that the Appellant is
collecting the charges as under :
• Contribution Towards Monday Meetings, Banquet Hall
Charges and Spouse Events &
• Contribution towards Club Activities, Rotary International
Fees & Rotary Magazine Subscription.
(c) Since a bundle of expenses are recovered in name of ‘membership
fees’ from members, reference to the concept of ’composite supply’
under CGST Act, 2017 is required :
(30) ”composite supply” means a supply made by a taxable per-
son to a recipient consisting of two or more taxable supplies of
goods or services or both, or any combination thereof, which are
naturally bundled and supplied in conjunction with each other in
the ordinary course of business, one of which is a principal supply;
(d) To determine input tax credit on food and beverages supplied by
outside caterers, Section 17(5) of GST Act, 2017 (as amended) pro-
vides as under :-
(5) Notwithstanding anything contained in sub-section (1) of sec-
tion 16 and sub-section (1) of section 18, input tax credit shall not be
available in respect of the following, namely :-
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