UNION OF INDIA . vs M/S MARGADARSHI CHIT FUNDS(P)LTD.ETC. — C.A. No. 5724 - 5725/2011

Summary of Union of India v. M/S Margadarshi Chit Funds (P) Ltd. Court Decision: The Supreme Court dismissed the Union of India's appeal, affirming that service tax is NOT leviable on chit fund activities during the period June 1, 2007 to June 30, 2012. Key Reasoning: The Court held that chit fund business does not constitute "cash management" or "fund management" under the amended definition of banking and financial services in the Finance Act, 2007. Even after the deletion of the words "but does not include cash management," chit funds remain outside the scope of taxable services because they represent a special contract between subscribers and a foreman, not a financial service involving management of assets or cash. This case analysis is maintained by casestatus.in based on publicly available court records.