Service tax on membership fees of beauty parlour

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2014 Suppose a beauty parlour offers membership to its regular customers where it charges Rs 1000 for an annual membership.

After obtaining a membership, a member will get a 20% discount on all the services provided by the beauty parlour for a year. So if the normal price of the haircut is Rs 500 then a member will have to pay only Rs. 400. Now the parlour charges service tax on Rs. 400.

But my query is that whether the beauty parlour should charge service tax on the membership fees of Rs. 1000 also?

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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12 August 2014 yes it will be charged on 1000 i.e gross amount but service tax is applicable when service is provided for a value exceeding 10 lakhs

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2014 But they are charging the membership only to offer discounts. there is no service being provided in lieu of the membership fees. then why should it attract service tax at all. service tax should only be applicable when one avails any service provided by the parlour for eg haircut etc.