April 2011
(2011) 21 STR 445 (Tri.-Bang) – Country Club (India) Ltd. vs. Comm. Of Cus., C. Ex.& S.T., Hyderabad
By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Cost of land paid to sister concern deducted by the assessee club from the consideration received from members includible in value in terms of CBEC Circular dated 27/07/2005 subject to actual finding of facts.
Facts: The appellant was providing membership to general public with or without land and was discharging service tax on the membership charges after deducting cost of land under “club or association services”. The appellant transferred amount collected from members as cost of land to its sister concern and the said sister concern allotted plots to the members. The cost of land was deducted since such amount was not towards facilities or advantages given to a member. However, the Department demanded service tax on gross value charged without allowing deduction of cost of land on the ground that the amount received towards cost of land, is for an advantage that could accrue to a member relying on Board’s Circular dated 27/07/2005. Moreover, the Department contended that the appellant could not offer evidences for the amount apportioned towards the cost of land to its sister concern.
Held:
The matter was remanded back to the adjudicating authority to ascertain whether any amount towards cost of land was transferred to sister concern. If the answer was in affirmative, the amount apportioned towards sale of item i.e. sale of land in present case, would be excludible from gross value for service tax levy based on the Board’s Circular dated 27/07/2005 which is binding on the department.
