Service tax
B K Sahai
(Querist) 04 August 2016
This query is : Resolved
I live in a township where there are about 1500 flats. The builder has taken supply from state electricity board at higher voltage and has installed their own sub meters in the flats. Based on consumption they are billing us at tariff of the electricity board and charging service tax on the bill. Is service tax payable in this case.
B K Sahai
(Querist) 05 August 2016
for your advice please
malipeddi jaggarao
(Expert) 05 August 2016
Since service tax is payable on the consolidated bill, while dividing the bill for each resident, the service tax has also to be divided. Otherwise, who will bear that amount.
Ms.Usha Kapoor
(Expert) 05 August 2016
Dear Client,
Has the Municipal Corporation issued you occupancy certificate? The builder has right to collect service taxes on purchase price or the value of the building under construction at 25% flat rate. Since how long you've been in occupation of the flats. Within 3 years or up to 3 years the builder has right to collect service charges on flats under construction or the value of purchase price at the rate of 25%. But if 5 or more years have expired he has no right to collect service tax from flat owners.Claim refund of service tax paid to him until now in arrears he is bound to refund. His liability for service tax he is palming off on you.. He has no right to collect service tax on providing electricity to you on account of supplying from state electricity Board. You can Directly approach the State electricity Department, they would install meters and collect charges and service tax etc.If you appreciate this answer please click the thank you button on my profile.
adv.bharat @ PUNE
(Expert) 05 August 2016
Author need to explain the query raised by expert to get solution to its problem.
Rajendra K Goyal
(Expert) 05 August 2016
If the builder is paying service tax on bulk supply from government, he have to recover from flat owners.
P. Venu
(Expert) 05 August 2016
The arrangement appears to be too tedious and, perhaps, unauthorised. Please check up with the Electricity Authorities.
B K Sahai
(Querist) 06 August 2016
The builder is not paying service tax on electricity as they are getting electricity supply from state electricity board who being a distribution licencee are exempted from ST. After getting this supply at a receiving point the builder is distributing to our flats through the sub meters installed by the builder. Upon consumption the builder is serving electricity bill to all and charging ST. Is this legally valid to levy ST on electricity?
B K Sahai
(Querist) 06 August 2016
The builder is not paying service tax on electricity as they are getting electricity supply from state electricity board who being a distribution licencee are exempted from ST. After getting this supply at a receiving point the builder is distributing to our flats through the sub meters installed by the builder. Upon consumption the builder is serving electricity bill to all and charging ST. Is this legally valid to levy ST on electricity?
