• Service tax on maintenance for apartment

Dear sir 

Our builder is maintaining our apartment with regards to common areas of residential complex for first 5 years. We have paid a lump sum amount for this @ Rs 1800 per month. Now as per service tax laws we are not entitled to pay service tax as it's less than Rs 5000 per month but still the builder is asking us service tax and the builder is also not going to give us tax receipts paid to govt.

My question is:

1. Does the builder right in charging us service tax
2. Can I file RTI to ask about the service tax paid by builder.

Asked 3 years ago in Service Tax from Hyderabad, Telangana

Ideally builder is not entitled to charge service tax, still if he does he needs to issue service tax receipts to each member for the sum received and also present you the copies of challans for service tax paid to Government when requested.

Swapnil Patil
CA, Navi Mumbai
30 Answers
4 Consultations

4.6 on 5.0

Here the builder is correct in charging the service tax . The provision you are talking is covered under in clause no 28 of the list of the exempted services as mentioned in Notification no 25/2012 . As per this clause , only those unincorporated body or Non profit entity registered under any law for the time being in force who provides services to its own members by way of reimbursement of charges or share of contribution to its member not exceeding amount of Rs 5000/- per member per month . Further circular no 175/01/2014 dated 10/01/2014 clarifies this . Thus the builder which may be profit making entity is correct in charging the service tax . Under the RTI you have a right to get the information .

Prakash Sinha
CA, New Delhi Area, India
120 Answers
17 Consultations

4.9 on 5.0

Dear SIr,

The Service Tax law which you are talking about is when the Service is provided by the Co-Operative Society to its members and the charges are recovered or charged in advance to its members.

But in the above mentioned case, the service is provided by the builder and hence Taxable.

2. Yes, you can file an RTI against the builder and he is liable to provide you with the details.

Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

1. It is true that there is no Service Tax on maintenance charges paid for maintenance of common areas in apartment complex upto the service charges for Rs.5,000/- per month. Normally, the maintenance charges are collected by resident welfare association and this exemption clearly refers to maintenance charges paid to resident welfare association (RWA) upto Rs.5,000/- . For collecting service tax on apartment maintenance charges the builder should give a bill including service tax to the service receiver and service receiver should collect receipt for payment of maintenance charges as per the bill provided by the builder. However, it seems that builder has collected service charges and service tax in cash without raising bill and furnishing receipt for the amount received.

2. Filing RTI Application may not help in obtaining required details. You may inform Service Tax Department about the collection of lump sum service charges in cash without raising bill and without providing receipt for the amount received. This could help the service tax department and not you.

Vijay N. Kale
CA, Hyderabad
248 Answers
13 Consultations

4.9 on 5.0

If he is charging service tax then demand for the original invoice on which service tax number is mentioned.

and for RTI I am not sure but you can file the RTI with the service tax department for this issue.

Kavit Dilip Gadhia
CA, Mumbai
35 Answers

4.6 on 5.0

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