Service Tax on Market Associations

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CA PARAS BAFNA (Querist)
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01 May 2009 Whether market associations and co-operative service societies are liable to pay service tax on Maintenance Charges collected by them from members?
The said amount is utilised for the purpose of maintaining common facilities like lift, security, electricity, parking facility etc.

Whether there is any exemption limit available to them like Rs 3000/pm or less in case of Residential Co-Op Socities.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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02 May 2009 No exmeption similar to that for residential complex.

However the answer maybe in rule 5 (2) of the ST ( determination of Value) Rules 2006 - if substantial conditions are met and those third party payment are excluded then whether the Rs. 10 Lakhs exemption is enough is an exercise whcih can be conducted.

CA PARAS BAFNA

CA PARAS BAFNA (Querist)
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02 May 2009 Thank you for the prompt and concised reply but I still want to get clarification in the following matters-

1. Rule 5(2) ST(DV) Rules 2006:

Whether we may treat such society or association as an agent of the service receivers(i.e the shopholders)as these are exclusively working on behalf of the member shopholders.

Whether expenseswise bills are necessarily required to be issued when it is deemed that surplus if any out of maintenance will be utilised for the purposes of members only and not otherwise?