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Is Service tax applicabe for Monthly Maintenance Charges by Apartment Association?

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girisri - 20 April, 2011 | Bangalore | Living | Need Help | Service tax

The Maintenance Charges are collected by Apartment Association which is not a profit making body.

As per law, does service tax need to be collected from Aprtment members?

Is the Service tax appliable to be levied on the maintenance charges? even though the Apartment is maintained by the Association and not by the Builder.

COMMENTS

Want to reiterate this question

sanjayv - 22 July, 2011 - 17:42

Should an apartment owner's association register for and pay service tax on the monthly maintenance collected from its members.  Our association is registered under the KAOA (Karnataka Apartment Ownership Act of 1972).  We collect money from our members and provide various services through various agencies contracted by us on a non-profit basis.  Our accounts for the last fiscal were just audited and the CA tells us that we should pay service tax.

 

It just seems to be either an injustice or a waste of time to me.  The association is like a cooperative society run by office bearers elected from among its members.  The office bearers work pro bono , as volunteers.  I would define this activity as "self service". We pay service tax on all the bills from our contractors where it is applicable.  Then why should we go about collecting service tax from our members on their maintenance fees?!  If we do charge service tax, then we will have to go through and claim credit for the service tax we pay to the contractors.  Just seems to be a colossal waste of time and energy.

Does anybody have any thoughts / comments on this?

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