Unincorporated club or association is ‘person’ :
An association of persons or a body of individuals, whether incorporated or not, in India or outside India is a ‘person’ – section 2(84)(f) of CGST Act,
Provision by a club, association, society or any such body (for a subscription or any other consideration) of the facilities or benefits to its members have been specifically covered in definition of ‘business’ in section 2(17) (e) of CGST Act.
This is to avoid argument of ‘mutuality’ and reduce litigation.
Supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration will be ‘supply of goods’ – para 7 of Schedule II of CGST Act.
Interestingly, there is no parallel provision in respect of services provided by club or association to its members. However, it should come under ‘supply’ which is a wide definition. This activity has been specifically included in definition of ‘business’ and hence should be subject to GST.
Thus, goods or services supplied by an unincorporated club, association or body of persons to its members will be subject to GST.
A club letting out rooms and cottages to its members and guests on rent is liable to pay luxury tax – Trivandrum Club v. Sales Tax Officer (2012) 54 VST 442 (Ker HC DB).
However, there is mutuality between members and club. There are conflicting judgments on this issue. Hence, the issue has been referred to large bench in State of West Bengal v. Calcutta Club Ltd. (2016) 56 GST 216 = 70 212 = 96 VST 20 (SC).