Does this type of society etc. is covered under Service Tax

Indian Service Tax

Clarification

Point No. 4

A housing society or a club is running health club/fitness centre or sports club for its members and collecting maintenance fees. Does this type of society etc. is covered under Service Tax? The point to be noted as that such societies/clubs render such facilities to its members only and its income is exempted from Income Tax on "mutuality" concept that one cannot make profit out of one-self (service to its members only and not outsiders). The charges levied are for maintenance or improvement of the facilities.

Yes - The Chairperson clarified that, as per clause (42) of the Finance Act, 1994, "health and fitness service" means physical well being service such as sauna and steam bath, Turkish bath, solarium, spa reducing or slimming massage) or any other like service. As per clause 90 (zw), the taxable service is any service provided to any person by a health club and fitness centre in relation to health and fitness service. The health club and fitness centre means any establishment including a hotel or a resort providing health and fitness service. Where clubs and fitness centres charges a monthly/periodic amount as membership fee and only members are allowed to avail their services, it is clarified that membership fee charged by the club is in lieu of periodic/monthly membership fee. The service tax does not provide mutuality concept but tax is imposed on commercial concept.

(Authority: RAC on 30/12/2002, Mumbai-II Commissionerate)