Service Tax Credit applicability to Apartment owners.

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This topic contains 1 reply, has 2 voices, and was last updated by  Kanika 1 year, 3 months ago.

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  • #6686


    Dear Sir,

    WE live in apartment complex having our own society for collection of Common area maintenance charges.
    We calculate our maintenance charges without considering the Service Tax paid to our service providers. About 56% of owners are liable to pay Service Tax as their maintenance charges exceed Rs. 5000 as per their area. We take Tax Tax credit to the extent of this 56% and pay the balance to the Govt.

    While calculation our Service tax liability we consider the following:
    Total ST paid to vendors X
    Amount that can be taken credit off 56% of X

    Total collection of ST@15% from owners who are liable to pay…..Say Y
    Credit to be taken is ……………………………56% of X and the
    balance is considered in our Maintenance calculation.

    Now the apartment owners who are paying Service tax is claiming that the credit taken by the Association if because of their liability to pay ST, any credit taken has to be passed on to the persons paying ST and not to all (100%) the residents.(who are not paying service tax).

    Please confirm whether this can be allowed.

    Now, the residents who are paying the service tax demand that the credit should be passed on to them as they are paying service tax and others are not paying.

  • #6705


    Service tax on club or association service. which covers resident welfare association (RWA) was introduced with effect from 16.6.2005 vide section 65(105)(zzze) read with section 65(25a) was later renumbered as (25aa)]

    Chartered accountant firms

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