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Can a housing society charge us service tax

Avril (NA) (32 Points)

09 November 2015

My Housing Society/Builder is charging me a whopping 14 % service tax on the quarterly maintenance we'vre paying them. Is that lawful/correct? As per my understanding this was under way and only waiting the formal approval from the supreme court. Has this happened? Can my Hsg Soc, charge me this?

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3 Replies

MAYUR BIYANI (Assistant Manager-Taxation & Accounts) (142 Points)
Replied 10 November 2015

Co-op society is not a body corporate as per companies act, 2013. Hence service tax is not leviable for maintainence chgs

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 10 November 2015

There are a number of articles on this web site on ST on a Housing society. 2 high courts + Tribunal have held that there is no liability due to the members and the association/ socienty being the same- principle of mutuality as in income tax. Therefore no service inthe absence of service provider + receiver. One cannot provide service to self.

Secondly the socienty only acts as conduti to collect monies for services provided by 3 rd parties. It is merely getting amounts paid reimbursed. Delhi High Court has hedl that reimbusements cannot be said tobe part of service. Not liable.

Socienty may take proper legal opinion from local expert in Service Tax and go forward.

Avril (NA) (32 Points)
Replied 12 November 2015

The problem here is that the society isnt formed yet. The builder hasnt yet handed over and so all maintenance is being charged by him, the Residents Welfare Assn is just a figurehead and no one has the capacity to take on the buillder. Now i realise that he shouldnt be charging us this. Thanks for clarifying this question.