service tax on maintenance collected by the builder

You can verify the circular no.17/01/14-ST dated:10-1-2014. Service tax is not applicable on maintenance charge collected by builder/society  (limit Rs.5000/- per month)

Only the RWA which is managing the maintenance is exempted in terms of the abovementioned circular but private developer not exempted & service tax on maintenance will be included. The Rathi judgment might not be applicable as that was for one time maintenance payment / deposit to meet out a statutory requirement as per MOFA act. Running maintenance is a different issue and will attract service tax. 

I have purchased under construction flat in Mulund, Mumbai. The flat cost is Rs 1.45 crore and the carpet area of the flat is 1215 sq ft.

I have made part payment in Oct 2012 and was charged Service Tax @ 3.09%. From March 2013, I was advised the Service Tax has increased to 3.708%. Please advise if this is correct.

Additionally the builder has charged me Service Tax @ 12.36% for the following payments made by us towards charges / deposits which is normally due on completion. Please advise if this is correct. I understand service tax cannot be collected on maintenance charges. Appreciate your guidance.

CLUBHOUSE MEMBERSHIP FEES Rs 370000

SOCIETY FORMATION CHARGES Rs 2500

MAINTENANCE OUTGOING CHARGES (18 MONTHS DEPOSIT) Rs 166500

INFRASTRUCTURE CHARGES Rs 370000

Service tax is applicable on all installments. If maintenance is collected by a third party or private agency, maintenance charges will attract service tax. Maintenance Security deposit will not attract service tax. 

Hi Jeetender,

OK, I also read the notification of Finance Department, says, if third party maintanance to residents of a society, service tax liable. Fine, But please tell me does residents have right to get receipt of paid amount with service tax as per guideline by Service tax departemnt. We are not getting any receipt with printed service provider name, types of service, TIN Number or Service Tax number. We get receipt on a excel sheet paper without above details even no third party service provider name and address. 

Can you guide please wether builder or third party should provide valid receipt as per guideline by Finance dept, Service tax department.

Ajay Kr Singh

The agency receiving the maintenance with service tax must issue appropriate invoice / receipt, bearing the amount breakup and the service tax number etc.

Hi,

In my case its the 18 months maintenance security deposit  which is collected by the builder.  the builder is not providing correct receipt with bifurcation.

Please advise if the 18 months maintenance security deposit  attracts service tax.

Kindly also advise how much should the society formation charges be levied.  There is inconsistency in the charges levied by the builder.