Country Club (India) Ltd Vs Commissioner of Central Tax (CESTAT Hyderabad)
The CESTAT Hyderabad dealt with appeals concerning the levy of service tax on a company providing “Club or Association services” and “Health Club & Fitness Center services” for the period from 2005–06 to 2013–14, based on multiple show cause notices. The primary issue was the determination of taxable value, particularly whether the value attributable to land sold along with club membership should be included in the gross value for service tax purposes.
The appellant offered various categories of memberships, including options where members could purchase land along with membership. The department issued demands treating the entire consideration, including the value of land, as taxable. Although the appellant had started paying service tax on applicable services on a cum-tax basis, it did not pay tax on amounts attributable to land, asserting that such transactions involved transfer of immovable property and were not liable to service tax.
The matter had earlier been remanded multiple times by the Tribunal, primarily to verify the correctness of the appellant’s claim regarding the value of land transferred to members through a sister concern. The Tribunal had consistently held that land value cannot be included in the taxable value and had prescribed methods for verification, including examination of sale deeds, financial records, and other supporting documents.
