V IMP : LEVY OF SERVICE TAX BY INCORPORATED CLUBS – HELD – We are also of the view that from 2005 onwards, the Finance Act of 1994 does not purport to levy service tax on members’ clubs in the incorporated form. The expression “body of persons” may subsume within it persons who come together for a common purpose, but cannot possibly include a company or a registered cooperative society. Thus, Explanation 3(a) to Section 65B(44) does not apply to members’ clubs which are incorporated. Consequently, show-cause notices, demand notices and other action taken to levy and collect service tax from incorporated members’ clubs are declared to be void and of no effect in law.
1.The definition of “club or association” contained in Section 65 (25a) makes it plain that any person or body of persons providing services for a subscription or any other amount…