Service tax applicability on society maintenance charges

This query is : Resolved

Jyoti (Querist)
Follow

09 June 2014 Hi,

Does service tax applicable on the Society maintenance charges collected from Non Profit making organisation ?

Is there any ways for non profit organisation to contend that service tax is not applicable to it as it is non profit organisation and to pay the flat maintenance charges excluding service tax

Thanks,

Jyoti

CA UMESH DULAL

CA UMESH DULAL (Expert)
Follow

10 June 2014 No service tax is payable on maintenance charges collected by housing society (in your case) for use of common services like security etc if the sum is less than 5000 per month per member.

Jyoti

Jyoti (Querist)
Follow

10 June 2014 In this case Non profit making organisation has the office premises in the commercial complex and is liable to pay the flat maintenance charges to the society.

Since the service recipient is engaged in non profit making activity it is not liable to service tax.

On basis of the fact that it is not liable to service tax can it ask the service provider the bill exclusive of the service tax

Jyoti

Jyoti (Querist)
Follow

12 June 2014 Hi,
Would like to share more clarification regarding the mentioned scenario.

When services (Renting of flat) is provided to charitable trust, whether service tax is applicable?

As charitable trust is not carrying any business activity, no service tax is applicable on the services provided by them. Can it take the same stand of non applicability of service tax on the service which they receive.

Thanks

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

24 July 2025 Here’s a detailed explanation on service tax applicability on society maintenance charges collected from a non-profit organization (NPO) and related points:

1. Is Service Tax Applicable on Society Maintenance Charges?
Generally, service tax is applicable on maintenance charges collected by housing societies if the amount per member exceeds ₹5,000 per month.

If the monthly maintenance per member is below ₹5,000, no service tax is levied as per the threshold limit exemption.

2. Impact of Non-Profit Status on Service Tax Liability
The non-profit status of an organization (like a charitable trust or society) does NOT automatically exempt it from service tax.

Service tax applies on the service received irrespective of whether the recipient is a non-profit or a profit-making entity.

So, if the maintenance charges exceed ₹5,000 per member per month, service tax is applicable on the society's invoice.

3. Can a Non-Profit Organization Ask for a Bill Without Service Tax?
No. The society (service provider) is obliged to charge service tax if applicable under the law.

The non-profit organization cannot refuse to pay service tax just because it is non-profit.

Service tax is not a tax on the recipient’s income or profit status but on the taxable service provided.

Therefore, if the amount crosses the threshold, society must charge service tax and issue a proper invoice including service tax.

4. Regarding Renting of Flats by a Charitable Trust
If a charitable trust is renting out flats or premises, service tax implications depend on whether it qualifies as a business activity.

If the charitable trust is not engaged in any business activity, then generally no service tax on renting of property.

However, if the trust carries out business or commercial activities (renting with profit motive), service tax may apply.

Summary:
Scenario Service Tax Applicability
Maintenance charges ₹5,000/month/member Service tax applicable on society’s invoice
Recipient is non-profit (NPO) Non-profit status does not exempt from service tax liability on received services
Renting of property by charitable trust If no business activity, no service tax; if business/commercial, service tax applies

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now