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Service Tax

(Querist) 24 April 2008 This query is : Resolved 
A trade association registered under socities act and having approval of registeration under section 10 & 11 of Income tax act collects membership fees towards ordinary membership and life membership fees. Do they have to collect service tax on this fees ?
Rajesh Thakker (Expert) 25 April 2008
Service tax is charge on amount received for any specified service provided by your trade association to your members or any other person, and not on membership/lifemembership.
mani (Querist) 27 April 2008
A notice has been served by the Service Tax Department stating why the association is not paying it on this !!!

Expert opinions given by two different persons on this states that if the service tax is not collected, then it need not be paid. But in future, it is recommended that the service be charged and collected on membership fees also.!!

Chapter V of the Finance Act, 1994

(* amendments made vide Finance Act, 2007)

Service Tax

Section 65

(25a) “club or association” means any person or body of persons providing services, facilities or advantages, for a subscription or any other amount, to its members, but does not include—

(i) any body established or constituted by or under any law for the time being in force; or

(ii) any person or body of persons engaged in the activities of trade unions, promotion of agriculture, horticulture or animal husbandry; or

(iii) any person or body of persons engaged in any activity having objectives which are in the nature of public service and are of a charitable, religious or political nature; or

(iv) any person or body of persons associated with press or media;
Rajesh Kumar (Expert) 06 May 2008
The service tax is leviable.
The expert opinion that if taxes are not collected, it is not required to paid is not correct- the assessee is liable even when he didint collect the taxes.
However, if you get your association registered as "trade union" under the Trade Unions Act, no service tax is payable.
Presently you are required to pay service tax.

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