Club Membership fees

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Meera Joisher (Querist)
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15 July 2011 When I am receiving membership fees (to be subject to service tax under head of club membership servide), in past when ST was payable on receipt basis, as & when I received the fees, I discharged teh liability. However from 01/04/11, when ST is liable on accrual basis, when should I consider such fees as being accrued? Following are the main reasons for consideration :
1. Not necessary that all the past members shall become members in the current year. So on the first day of the next year, I cannot assume that liability shall be same as last year & thus discharge it off.

2. I give a grace period of 3 months for payment of membership fees. If fees is not paid till then, I cancel the membership. But till then I may or may not continue to provide the membership benefit to the past members.

3. Thereafter also, if the past member pays the membership fees for the whole year, I consider him as member & give him the benefit. But till he pays the amount, I am not sure if he will become member of not.

4. Till the fees is received, I have absolutely no cue of whether he will become member or not. I donot receive any intimation etc also from the past members for willingness for continuation of membership.

U S Sharma

U S Sharma (Expert)
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17 July 2011 issue renewal notice/advise for payment to members, but issue receipt/bill only against payment, this will help you to account the liability on payment basis and will not violate the law also

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