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Service tax on non - profit entity

10 July 2013

Hi .
I have a service tax query .
A joint venture consortium has charged service tax on electricity provided to a non profit entity ( association ) on 31st march 2013 for the period 01/07/2012 till 31/03/2013.

My query is can this non profit association claim the input for the service tax paid and can it charge this service tax to its members ?? Also please advice in context on S.N. 28 of the Exemption Notification no. 25 /2012 dated 20.6.2012

Thanks in advance
Mayank

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Prabhat Kumar (Advocate & Consultant) (1912 Points)
Replied 10 July 2013

The association should take it as input service credit and utilise it for payment of output service provided to it's members.They should charge service tax from it's members if any taxable service is provided to them as now association and it's members are treated as distinct person.Entry 28 of mega notification exempt the non profit association only in 3 situation,i.e in the case of trde union or if exempted service is being provided by the association or association is a housing society,if the association is not falling inthe abovesaid categories then service tax is payable.

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