Page 119 - GSTL_18th June 2020_Vol 37_Part 3

2020 ] SATURDAY CLUB LTD. v. COMMISSIONER OF CGST & C. EX., KOLKATA 333
period for 2009-10 to 2011-12 on the taxability of receipt from the members under
‘Minimum Billing’ and the Appellant was requested to pay service tax of Rs.
1,97,741/- and further letters from Range office seeking data of minimum billing
amount charged from its members for the period Oct., 2007 to Oct., 2012 which
culminated to a SCN dated 22-42013 where in a demand of Rs.5,02,565/- along
with interest under Section 75 and penalty under Section 78 of the Finance Act,
1994 was proposed on the amounts collected as minimum billing by the Appel-
lant from its members. The Appellant submitted its reply and stated that it has
started paying service tax on such amounts w.e.f. 1-7-2012 with the introduction
of negative list service and that there cannot be any liability prior to that date as
there was no provision of taxable services rendered by the Appellant prior to 1-7-
2012. The Ld. Adjudicating Authority confirmed the entire demand of tax with
interest and penalty as proposed in the SCN and on appeal before the Commis-
sioner (Appeals), the Commissioner (Appeals) upheld the OIO in its entirety.
Hence, the present appeal by the Appellant.
2. The Ld. Chartered Accountant, Shri Ankit Kanodia, appearing on
behalf of the appellant, submits that as per Rule 33(d) of the Articles of Associa-
tion of the club, a member is required to avail club facilities, which together with
usual monthly subscription of Rs. 250/- should be a minimum of Rs. 1500/- per
quarter. Thus, a member is bound by the by-laws of the club to consume/avail
the club facility amounting to Rs. 750/- per quarter failing which he/she should
make good the shortfall which is booked as other income in the financials as min-
imum billing from members. It is his contention that prior to 1-7-2012, the term
‘service’ was not defined and that in the present context, it would mean service
of any description made available to the members. He further submitted that
through minimum billing charges, no service was being provided to the mem-
bers but it was in the nature of penal amount to the extent of amount of services
not claimed by the member in a particular year or period and since Section
65(25a), as amended by Finance Act, 2011, defined ‘club or association’ as
“65(25a) club or association means any person or body of persons providing ser-
vices, facilities or advantages, primarily to its member, for a subscription or any
other amount, but does not include the following...”, any sum received on ac-
count of non-provision of service cannot be made taxable in absence of any taxa-
ble service per se. The Ld. CA placed reliance on the decision of the Co-ordinate
Bench of the Tribunal in Gondwana Club v. Commissioner of Customs & C. Ex., Nag-
pur [2016 (42) S.T.R. 895 (Tri. - Mumbai)]. The Ld. CA further submitted that the
amount of service tax for the period July, 2012 to Oct., 2012 for Rs. 44,298/- has
also not been appropriated by both the Adjudicating and the Appellate authority
which needs to be appropriated as the same was paid on 30-3-2013 vide consoli-
dated Challan No. 09828 for Rs. 4,94,400/-. He also stated that the issue being an
interpretational issue, extended period of limitation cannot be made applicable
in the instant case and also when on the similar issue for the earlier period, the
department has accepted the plea of non-taxability of such amounts.
3. The Ld. DR reiterated the contents of the Order and justified the
same.
4. Heard both sides and perused the appeal records.
5. We find the issue to be decided in the present case lies within a nar-
row compass as to the taxability of the amounts received by the Appellant from
its members as minimum billing for non-provision of service. We find that the
definition of club and association services has three major ingredients i.e.
GST LAW TIMES  18th June 2020  119