Service tax on maintenance charges in farm site
This query is : Resolved
pssundararajan
(Querist)
16 August 2015
I own a farm site admeasuring half an acre in krishnagiri district in tamilnadu in a gated community - the promoter is taking care of the maintenance - in that he organize drip irrigation, weeding, manuring and cleaning of plot and I pay annual charges of rs.18000/- - now they are demanding service tax at 16% on the maintenance charges - as far I know the service tax is applicable where the monthly payment exceeds rs.5000/- - please guide me and advise whether it is in order to collect service tax in this case - thanks
pssundararajan
(Querist)
25 August 2015
I would request experts to feed me back the queries raised above - thanks
24 July 2025
Here’s the clarification on service tax applicability on maintenance charges for your farm site:
1. **Service Tax Applicability**
Service tax was applicable on **maintenance or service charges collected for maintenance of residential complexes or gated communities** under the category of **"Renting of Immovable Property"** or **"Maintenance or Repair Services"** (depending on the nature of service) **if the aggregate amount exceeds Rs. 5,000 per month** per service recipient.
2. **Threshold of Rs. 5,000**
The Rs. 5,000 threshold is **monthly**, not annual.
So, if the promoter charges you Rs. 18,000 **per year**, this breaks down to Rs. 1,500 per month (18,000 / 12). This is **less than Rs. 5,000 per month**, so **service tax should not be applicable** on your maintenance charges.
3. **Is the service tax demand correct?**
Based on the above, the promoter **should not charge service tax** on your maintenance charges of Rs. 18,000 per annum because the monthly threshold is not crossed.
---
**Summary:**
* If maintenance charges are **less than Rs. 5,000 per month**, service tax is **not applicable**.
* Since Rs. 18,000/year = Rs. 1,500/month, no service tax should be charged in your case.
---
If you want, I can also check the latest notifications or exemptions for Tamil Nadu, but this is the general rule under the old service tax regime (pre-GST). Would you like me to help further?
1. **Service Tax Applicability**
Service tax was applicable on **maintenance or service charges collected for maintenance of residential complexes or gated communities** under the category of **"Renting of Immovable Property"** or **"Maintenance or Repair Services"** (depending on the nature of service) **if the aggregate amount exceeds Rs. 5,000 per month** per service recipient.
2. **Threshold of Rs. 5,000**
The Rs. 5,000 threshold is **monthly**, not annual.
So, if the promoter charges you Rs. 18,000 **per year**, this breaks down to Rs. 1,500 per month (18,000 / 12). This is **less than Rs. 5,000 per month**, so **service tax should not be applicable** on your maintenance charges.
3. **Is the service tax demand correct?**
Based on the above, the promoter **should not charge service tax** on your maintenance charges of Rs. 18,000 per annum because the monthly threshold is not crossed.
---
**Summary:**
* If maintenance charges are **less than Rs. 5,000 per month**, service tax is **not applicable**.
* Since Rs. 18,000/year = Rs. 1,500/month, no service tax should be charged in your case.
---
If you want, I can also check the latest notifications or exemptions for Tamil Nadu, but this is the general rule under the old service tax regime (pre-GST). Would you like me to help further?
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