TDS LIABLITY ON PAYMENT OF SUBSRIPTION

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Industry Associations face Service Tax Demands on Membership fees

AIT News Network

NEW DELHI. Industry Associations are on hit list of Service Tax for non-payment of service tax on Membership fee of Association under the notified taxable category of “Membership of Club or Association”, “Business Exhibition Service” and “Convention Service”.

• CII (Confederation of Indian Industries) has already been slapped the demand of service tax to the tune of Rs 34 Crore. 
   
• CII claimed itself to be a charitable and not-for profit organization planning a pro-active role in India’s development process and thus service tax is not applicable to them; and that they do not render any specific service to its members, unlike a club or association its members do not enjoy any facilities or advantages for the subscripttion they pay.
   
• Associations engaged in any activity having objectives which are in the nature of public service and are of a charitable , religious or political nature are specifically excluded from the ambit of service tax under the Finance Act 1994 as amended which is statutory provision for levy of service tax. But the service tax department has interesting alleged that CII is not a charitable organization.
   
• All the Industry Associations are already claiming exemption from Income Tax as Charitable organization but service tax department has stated that claiming charitable status under Income Tax is no defence for claiming exemption from service tax. Even BCCI is claiming exemption from income tax as charitable organization as it doing great charity by promoting cricket and organizing IPL.
   

Related News:

• Industry Associations not liable to Service Tax on Membership fees

   
• Elite Clubs and Associations under Service Tax Scanner

   
• No Service Tax on Not for profit organizations: CESTAT