Members Club
This query is : Resolved
07 May 2009
On getting some clarifications from the panel of Experts of this forum, yesterday, I had approached the Service Tax Department and I had been categorically told as under
1. Once the revenue of any Member's Club at any point of time crosses the threshold limit, ( and it is available to the Club), it has to pay Service Tax on the entire revenue and not on the difference amount that exceeds 10 lakhs.
2. The Club has been ear marking some portion of the Revenue (Donations) towards Building fund account and treated it as Donation to Building fund since 1998 as provided under the Bye-laws of the Club. The department argues that this would be treated as Mandatory Donation and would also be taxable revenue.
Whatever we had been doing (computing the income)during the past years, we have been asked to continue to do so . The Club has been treating the entire receipts as its revenue and paying ST since 2004. All along the revenue exceeds the threshold limit has not been utilized
Please clarify whether the stand taken and cleared by the Department is true? Please throw some lights on the subject and give us your valued opinion on the matter that will enable us to further proceed or drop the the entire matter
1. Once the revenue of any Member's Club at any point of time crosses the threshold limit, ( and it is available to the Club), it has to pay Service Tax on the entire revenue and not on the difference amount that exceeds 10 lakhs.
2. The Club has been ear marking some portion of the Revenue (Donations) towards Building fund account and treated it as Donation to Building fund since 1998 as provided under the Bye-laws of the Club. The department argues that this would be treated as Mandatory Donation and would also be taxable revenue.
Whatever we had been doing (computing the income)during the past years, we have been asked to continue to do so . The Club has been treating the entire receipts as its revenue and paying ST since 2004. All along the revenue exceeds the threshold limit has not been utilized
Please clarify whether the stand taken and cleared by the Department is true? Please throw some lights on the subject and give us your valued opinion on the matter that will enable us to further proceed or drop the the entire matter
Madhukar N Hiregange
(Expert)
07 May 2009
Whether a club and its members are different and whether one can provide service to oneslef is a legal issue which requires to be confirmed. However I think you should get in touch with an expert in your towen/ city.
Please also read Rule 5 (2) of the Service Tax ( Determination of Value ) Rules 2006 for some relief.
Please also read Rule 5 (2) of the Service Tax ( Determination of Value ) Rules 2006 for some relief.
Rajesh Kumar
(Expert)
07 May 2009
The legal issue has already been decided in case of Saturday Club by Kolkata High Court. The ruling has been followed in numerous cases like Dehradun Club etc.
Clubs are not required to pay any service tax on subscription charges. Further they are not required to pay any service tax on any service provided to its members.
The departmetal stand is rubbish.
Clubs are not required to pay any service tax on subscription charges. Further they are not required to pay any service tax on any service provided to its members.
The departmetal stand is rubbish.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Issuing of delivery challan by seller of goods
- MSME disclosure and disallowance
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- EPF ECR NEW RULES Sep 17th 2026
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
