Mutuality Exempts Clubs from Service Tax on Member Transactions, But Refunds Must Clear Unjust Enrichment Test: CESTAT

The CESTAT held that the principle of mutuality exempts clubs from service tax on transactions with their members, but refunds must still clear the test of unjust enrichment. The tribunal reiterated the established legal position that services provided by a club to its members are based on the principle of mutuality and are therefore not subject to service tax. However, it clarified that if a club is claiming a refund of service tax already paid, it must demonstrate that the burden of the tax has not been passed on to its members to avoid unjust enrichment.