ST on maintenance and electricity

I have purchased a flat in SAIL CITY a township at ranchi jharkhand developed by Kashish  builder. Prior to getting possession of the flat and registration of the flat in Nov'2014 I was asked to pay towards service tax which I paid on the considered value of the flat.
Now I am in possession of the flat and need your valued advice regarding ST being claimed by KUSPL (the utility services pvt ltd formed by the builder for monthly maintenance bill and electricity bill  as explained below.
1.Maintenance bill is being served by KUSPL on us at agreed rate per sqft and above this they are charging ST @ 14.50%. Is this ST admissible as per ST rules?
2. The builder is receiving electricity at their township sub station from state electricity board. From the sub stn they are supplying the same to each flat as per sale agreement which says that "Three phase connection to all flats with a provision of separate meter with 5KVA load for each unit." Now KUSPL is serving electricity bill based on meter readings for units consumed and above this they are charging ST @ 14.50% on this electricity bill. Is this ST on electricity consumed admissible as per ST rules?

---B K Sahai
Asked 1 year ago in Service Tax from Ranchi, Jharkhand
Dear Mr. Sahai,

With respect to your quarry please find below answer :

1. Yes Service Tax is payable on the maintenance charges collected by the society if the value of the same exceeds Rs. 5000/- per month per flat. In case the amount is less than Rs. 5000/- per month than same shall not attract Service Tax.

2. The Builder has made special arrangement for the provision of electricity and hence same will be considered as services provided by them and shall also attract service tax.
Vishrut Rajesh Shah
CA, Ahmedabad
194 Answers
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Dear Sir,

As it is mentioned in your electricity bill, it self justifies that this is specific services and provision is done exclusively by builders for residents.
Even currently also they are the one who are facilitating the electricity. Collect the payment on your behalf and in turn make payment to the electricity company. so it will attract service tax thereon. 
Vishrut Rajesh Shah
CA, Ahmedabad
194 Answers
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Dear Sir,

1. For your query No.1, Service Tax can be charged by the society if your maintenance charges exceed Rs.5000/- every month. But it will not be charged on Govt/ Statutory Charges, Security Charges if it is exactly covered by the Society and paid to the contractor, Insurance charges etc. So for a more clearer view we would need the exact break up of your bill and also if it is cost to cost or the society is keeping a markup.

2. Service Tax can be charged by the society if they are charging you a convinience fee of some sort on the electricity bill, then only upto the limit of the fee. If that is not the case then I assume No Service Tax can be levied.

Thanking You.
Rohit R Sharma
CA, Mumbai
719 Answers
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