Service tax on apartment building maintenance charges

Notifications 5005 views 4 replies

Satpathy

Manager

24 Points Joined July 2012

Hello friends,

I am a CA, passed out in 1998 and a new member to the club.

I have a query on the FY 12 budget and govt notification on service taxes.

The notification highlighted that if the service tax is collected by the Residents Association the maintenance fees is exempted from service tax. The limit of the maintenance fee per month is Rs. 5000.

My question is : if the maintenance fee is not collected by the resident association and by a co. engaged by the builder and he continues to provide services till the resident association is formed, what is the service tax liability on the services offered by the co. for the maintenance and charges collected through a monthly billing.

It would be great if some one give me insight to this typical case with extract from the act, noficiation from Govt on service tax and recent case laws and help some innocent people who keep paying taxes when they are not liable to pay.

regards,

Satpathy

Replies (4)

CA Unnikrishnan Nair N

Chartered Accountant

2083 Points Joined February 2011

Since the service is not ptovided to own members, it does not fall withihn the scope of exemption. Seems to be taxable.

Samir

ACA

113 Points Joined March 2010

In the Notification 25/2012, at Point No. 28(c), it is mentioned that: up to an amount of Rs. 5000/- per month per member. . . . .

What if the said amount exceeds Rs. 5,000/-

(1) Will whole of such sum will fall under the ambit of Service tax or only the amounts exceeding Rs. 5,000/-, like can this Notification be considered as deduction/ rebate?

(2) Will the Rs. 15 lacs be still applicable as basic exemption, to be out of the purview of Service Tax. For eg: if the amounts so mentioned exceed Rs. 5K per month, but the yearly collection is below Rs. 15 lacs?

Shyamal Dasgupta

Manager

21 Points Joined April 2009

Kindly clarify if the builder of a housing complex can charge service tax on monthly maintenance charges even if the amount is less than Rs 2000.

NirmalVilla

Student Others

22 Points Joined September 2013

It's upto depends on the Luxury hotels as well as Furnished Service Apartments, if you more than 1,500 to 2000 rs you have to pay service tax as well as luxury tax to that government.