Service tax on escrow account

sreedhar ramasamy (4 Points)

15 February 2016  

Hi Sir / Madam, We are about to launch an online Rental Property management platform wherein Landlord and Tenant can colloborate and track their entire Tenancy Tenure with respect to Token Advance, Security Deposit, Rental Agreement, Monthly Rental payment, online rental receipts, Utility Bill Payment, Renewal / Termination of Tenancy, Final Settlement etc.

We are not a property management service provider but just as a online software tool provider for tracking rental properties.

Our query is we are about to  provide   an online Paynow function for the Tenant via payment gateway. Lets Say the Tenant is asked to pay Rs 10010 and  the Payment comes to The Software Company's Escrow Account held at a renowned Bank and  we instruct the Bank by end of day to debit the escrow acccount to credit

a. Rs 10 to our Company current account for the service rendered

b. Rs 9,000 rental amount to Landlord Account towards Rent

c. Rs 1000 to Apartment association towards maintenance fees

In this scenario, is there any implication of service tax on the total amount held on escrow or with respect amount splitted and paid as mentioned in point a, b and c.

Looking forward for your advice.

with regards

Sreedhar