This query is : Resolved 

20 March 2009

Notification no.8/2007 stated that RWA is exempted from service tax applicable u/s 65(105)(zzze)provided
1. the membership to the association is by the status of residency and
2.the amount of contribution received by each resident does not exceed Rs 3000pm
My query is if the contribution exceeds Rs. 3000pm but the value of taxable service in this contribution is less than Rs. 3000 pm, then is service tax applicable to the RWA and on what amount. The RWA receives a consolidated quarterly amount from its residents towards various facilities provided.

K V Subba Rao (Expert)
20 March 2009

Notification states Consideration
"received" from individual an member.

So amount received is the criterion but not Value of Service (or amount spent by Association).

Once Service Tax liability arises, it is on whole amount but not on excess over Rs 3000

In case of Income Tax, we deduct Basic Exemption but such provision is not available for Service Tax

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