Service tax on co-operative societies
This query is : Resolved
17 December 2013
Please explain me how to calculate the service tax on member & society as a whole?
17 December 2013
member not providing service to society.. though society as a whole providing many facilities to members.
society will charge service tax from the members on the membership fee annual fee and on any such kind of receipt but only form those members from whom such receipts increase 5000 per month.
but this exemption of 5000 is only on such collection on which they providing facilities taken from third party.
if facility provided by authority directly no exemption at all.
note: electricity charges in housing society are exempt if satisfies conditions of pure agent
society will charge service tax from the members on the membership fee annual fee and on any such kind of receipt but only form those members from whom such receipts increase 5000 per month.
but this exemption of 5000 is only on such collection on which they providing facilities taken from third party.
if facility provided by authority directly no exemption at all.
note: electricity charges in housing society are exempt if satisfies conditions of pure agent
21 December 2013
If a member of Housing Society has 2 Flats in Same society what will be his exemption limit?
24 July 2025
Great question about service tax and cooperative housing societies! Here’s a clear breakdown:
---
### 1. **Who is liable to pay service tax in a cooperative housing society?**
* The **society itself** is the service provider because it provides services/facilities (like maintenance, security, water, electricity, common area services, etc.) to its members.
* The **members are recipients** of these services, **not service providers**.
### 2. **When is service tax applicable?**
* If the society **collects service charges (maintenance charges, fees) from members** and if the **aggregate amount exceeds Rs. 5,000 per month per member**, then the society is liable to pay service tax on the entire amount collected from that member.
* The Rs. 5,000 exemption limit applies **per member**.
* If the society provides services like electricity or water, which it gets from a third party, and passes on to members as a **"pure agent"**, then these charges are **exempt** from service tax.
* If the society **provides any other services directly**, then there is no exemption and service tax is payable on the entire amount.
---
### 3. **What if a member has multiple flats?**
* If a member owns **more than one flat** in the society, the exemption limit is **aggregated**.
* So, the **Rs. 5,000 exemption limit is per member, not per flat**.
* For example, if a member owns 2 flats and pays maintenance charges totaling Rs. 6,000 per month (combined), then the society needs to pay service tax on the entire Rs. 6,000 for that member.
* The exemption is **not Rs. 5,000 per flat**, but Rs. 5,000 per member.
---
### Summary Table:
| Scenario | Service Tax Applicability |
| ------------------------------------------------ | ------------------------------------------------- |
| Maintenance charges ≤ Rs. 5,000 per member/month | No service tax payable (exempt) |
| Maintenance charges > Rs. 5,000 per member/month | Service tax payable on the entire amount |
| Electricity/water charges (pure agent basis) | Exempt from service tax |
| Member owns multiple flats | Exemption limit aggregated across all flats owned |
---
If you want, I can help you with a sample calculation or a letter for your society explaining this to members. Would that help?
---
### 1. **Who is liable to pay service tax in a cooperative housing society?**
* The **society itself** is the service provider because it provides services/facilities (like maintenance, security, water, electricity, common area services, etc.) to its members.
* The **members are recipients** of these services, **not service providers**.
### 2. **When is service tax applicable?**
* If the society **collects service charges (maintenance charges, fees) from members** and if the **aggregate amount exceeds Rs. 5,000 per month per member**, then the society is liable to pay service tax on the entire amount collected from that member.
* The Rs. 5,000 exemption limit applies **per member**.
* If the society provides services like electricity or water, which it gets from a third party, and passes on to members as a **"pure agent"**, then these charges are **exempt** from service tax.
* If the society **provides any other services directly**, then there is no exemption and service tax is payable on the entire amount.
---
### 3. **What if a member has multiple flats?**
* If a member owns **more than one flat** in the society, the exemption limit is **aggregated**.
* So, the **Rs. 5,000 exemption limit is per member, not per flat**.
* For example, if a member owns 2 flats and pays maintenance charges totaling Rs. 6,000 per month (combined), then the society needs to pay service tax on the entire Rs. 6,000 for that member.
* The exemption is **not Rs. 5,000 per flat**, but Rs. 5,000 per member.
---
### Summary Table:
| Scenario | Service Tax Applicability |
| ------------------------------------------------ | ------------------------------------------------- |
| Maintenance charges ≤ Rs. 5,000 per member/month | No service tax payable (exempt) |
| Maintenance charges > Rs. 5,000 per member/month | Service tax payable on the entire amount |
| Electricity/water charges (pure agent basis) | Exempt from service tax |
| Member owns multiple flats | Exemption limit aggregated across all flats owned |
---
If you want, I can help you with a sample calculation or a letter for your society explaining this to members. Would that help?
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