The Chandigarh CESTAT ruled that the Punjab Cricket Association (PCA) is not liable to pay service tax under the heading “club or association service”.
The appellant, Punjab Cricket Association, is registered as a service tax assessee for providing “club or association services.” During the conduct of an audit, the Department noticed that the appellants have been receiving payments like registration fees, entrance fees, annual subscriptions, and charges for the provision of additional facilities like billiards, swimming pools, lawn tennis, and accommodation from its members and have not discharged the applicable service tax liability.
A show-cause notice was issued. The original authority confirmed the demand for service tax along with interest while appropriating an amount paid by the appellants. The department imposed a penalty under Sections 76 and 78 of the Finance Act, 1994. On an appeal filed by the appellants, the Commissioner (Appeals) passed the order confirming the duty of Rs. 8,09,168 along with the penalty under Sections 76 and 78.
The assessee contended that the PCA is in association with BCCI and enrolls eight categories of people as members. The broad categories being A and B, only associate members are charged a fee for enrolling as members; other members are not charged any fee. Therefore, the PCA is not a club or association for the purpose of Section 65(25a) of the Finance Act, 1994, and therefore, no service tax is leviable.
The definition of “club or association” contained in Section 65(25a) makes it plain that any person or body of persons providing services for a subscription or any other amount to its members would be within the tax net.
The tribunal ruled that PCAs are registered under the Society Registration Act, and the appellants are not liable to pay service tax under the heading “Club or Association Service”.
M/s Punjab Cricket Association Versus The Commissioner of Central Excise, Chandigarh-I