Service Tax on co-op. societies! Simply outrageous!

I today read in the newspaper that all the socieities collecting more than Rs. 400,000 from their members in a year will be liable to pay Service Tax at 10.2%! Thats simply outrageous! The babus making and implementing laws have gone insane!

Wake up babus, get some common sense from somewhere. Think hundred times before you try to be sensational 👿 because most of the times you people land up looking more stupid!

The assumption here is that the society is providing service to the members and therefore it is liable to pay service tax. What they have missed out here is that the socieites are “co-operative” societies. There is an element of mutuality. Society is not providing service to members, but members are coming together for particular purpose and are providing service to themselves! Only for the purpose of convenience and because they are enjoying certain common amenities they have come together! Simply because the law treats the societies as separate legal entity from members individually, doesn’t mean the element of mutuality is lost. Thats the foundation of co-operative societies.

To take a very simple example, a co-operative society can be compared to 5 friends going out. One of them first collects money from all and then keeps track of accounts. At the end of the outing, they simply pay their balance share of expenditure or get a refund. Now where is the question of any taxable service here? 👿 🙄

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