The CBEC has given a clarification on service tax liability of trade bodies soon after a show cause notice issued by it to the Confederation of Indian Industry (CII) for service tax evasion of about Rs 33 crore.
The services provided by these (trade) associations are not of charitable, religious or political nature and their objectives cannot be categorised as public service, the CBEC said.
"They (trade associations) collect membership fees and other charges from their members and they work for the interest of trade and industries.... Accordingly, they do not fall within the scope of the excluded categories," it clarified.
The board also said that the services provided by trade associations to their members are not "self service" and hence taxable.
Taxable services include any service provided by any unincorporated association or body of person to a member for cash, deferred payment or any other valuable consideration, the board added.
