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Seeking Help (NA)     09 November 2015

Can a housing society charge service tax on maintenance?

My Housing Society/Builder is charging me a whopping 14 % service tax on the quarterly maintenance we'vre paying them. Is that lawful/correct? As per my understanding this was under way and only waiting the formal approval from the supreme court. Has this happened? Can my Hsg Soc, charge me this?

 



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 4 Replies

uphar   09 November 2015

I think not they can not.

siddhartha sinha   09 November 2015

The decision that ,service tax cannot be imposed, was given by a tax tribunal in Mumbai though no effective date was announced. A similar case is on at the apex court and the jugement is going to decide the final stance. Till then I believe the society has to keep collecting s.t. especially if they have been demanded to by tax authorities.Basically the service tax was imposed not upon you, but on the society, by the tax authority. Hence they are collecting from you.

amit sharma   11 November 2015

Actually, as mentioned by expert above, it is the service tax authority charging tax on the society, hence society is collecting this from members. Yes the case is pending in sc

K.S.NAVEEN KUMAR   14 November 2015

My other friends are referring to the principle of mutuality in terms of which there cannot be any service between the society and its members inter-se. In my view, the explanation in the definition of 'service' post negative list regime has not enabled the Government to overcome this principle. In fact in the context of Sales Tax law, similar issues had cropped up and the Constitution itself was amended in the year 1982 to overcome the mutuality principle. Consequently, the respective State laws were amended to enable taxing such transactions. 

 

There is no outcome of Jthe matter pending in the SC on mutuality principle. 

 


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