Whether Housing Societies are liable to pay Service Tax on various charges, fees and other amounts collected from the members?
Yes. As per the clarification given by Jt. Commissioner of Service Tax, Mumbai under Ref. No.V/ST/HQ/Tech/Ref-25/06/1956. The amounts liable for
Accounts liable for Service Tax payment :
(i) Common Electricity
(ii) Repairs Maintenance of lifts
(iii) Service Charges
(iv) Car parking charges
(vi) Charges for health club, swimming pool, etc.
(vi) Use of terrace, etc for functions to non-members
(vii) Sale of terrace space and compound for hordings
The following accounts are not liable for Service Tax Payments :
(i) Property Tax
(ii) Water/Sewerage Tax
(iii) Contribution to Repairs & Maintenance Fund
(iv) Major Repair Fund
(v) Contribution to Sinking Fund
(vi) Interest on defaulted charges
(vii) Repayment of loan and interest
(viii) Non-occupancy charges
(ix) Lease Rent
(x) Non-Agricultural Tax
(xi) Admission / Entrance Fees
(xii) Issue of shares
(xiv) Premium on transfer
(xv) Voluntary donations
Service Tax Structure : (Courtesy: Hemant Agrawal)
1. Service Tax @ 10.2% is applicable on all CHS
2. Cumulative collection “UPTO” 10 lakh rupees of CHS Services charges, is exempt and after that 10.2% service tax has to be recovered from members and deposited within 15 days of collection.
3. This rough-on works out to exempted limit upto Rs. 3000/- per CHS member. Obviously small and medium size CHS’s would not come under the Service Tax criteria.
4. Check out the following link for Service Tax on CHS’s.