Service tax on membership fees of transportation society

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2012 A society has been registered under cooperative society registration act,1860. This society is enganged in transportation business. Every member of the society is contributig monthly a fixed amount to meet the administrative expenses of the society, such as , staff salary, rent of building, and other office expenses
my question is that whether monthly contribution made by the members of the society for meeting the administrative cost is taxable under service tax act or not?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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20 September 2012 To charge the service tax there should be service and the service is defined under clause (44) of the new section 65B which means any activity for consideration carried out by a person for another and includes a declared service.
The concept ‘activity for a consideration’ involves an element of contractual relationship wherein the person doing an activity does so at the desire of the person for whom the activity is done in exchange for a consideration. An activity done without such a relationship i.e. without the express or implied contractual reciprocity of a consideration would not be an ‘activity for consideration’ even though such an activity may lead to accrual of gains to the person carrying
out the activity.

Here, the members of the society are not receiving any service from the society, neither the members became service reciever nor the society became the service provider.