The government has slapped a notice to apex industry association Confederation of Indian Industries (CII) asking it to make a payment of Rs 33 crore as service tax, but the chamber has questioned the move.

"Confederation of Indian Industries (CII) was issued a show-cause notice by the Service Tax Commissionerate, Delhi demanding Rs 32.71 crore under the services of 'club or association' and 'business exhibitions'," a revenue department notice stated.

"We are not defaulting in any way. We have already sought an explanation as to how membership subscription would come under the service tax net," a CII spokesperson said when contacted.

"The letter is not a show-cause notice, instead the department has just asked for an explanation regarding service tax. We have sent a reply," she added.

The notice, however, said: "CII has been providing club or association services but has not been paying service tax on the same. They have also not paid service tax on 'overseas trade fair' under business exhibition services".

CII, which has been organising various exhibitions, including popular auto shows, defence exhibitions, was issued a show-cause notice for not paying service tax, said a Service tax department official.

Service tax, under the provisions of the law, is levied on club or association which have been defined as "person or body of persons providing services, facilities or advantages, for a subscription or any other amount, to its members". The entities engaged in public service, however, are exempted from payment of service tax.