Housing Society liable to Service Tax under Club or association – Mumbai Service Tax
The other day an agitated lawyer called up and said, these Service Tax guys want to collect Service Tax on the charges collected by ‘our’ flat owner’s association. She was worried that the charges collected are from members and that too for their common good. “Where is the question of service?”, she wondered. She was convinced that service rendered by the association to its own members was not taxable.
The Mumbai Service Tax Commissioner had sometime ago clarified that,
++ under the law any person or body of persons, by whatever name called, whether registered or not or whether incorporated or not, providing services, facilities or advantages for a subscription or any other amount to its member is to pay service tax for rendering such service, facilities or advantages.
++ Services can be numerous, such as security of premises, upkeep of the premises, maintenance of common passage, maintenance or upkeep of parking facilities, maintenance and upkeep of lifts, etc.
++ The commercial or non-commercial nature of such body has no bearing on the levy of service tax on the services/facilities/advantages provided by such body.
++ Further, the legal provision provide for tax even when the services, etc., are provided by such body to its own members.
++ A housing society which is registered under the Co-operative Societies Act is a legal entity, which provides services and facilities to its members for a consideration and accordingly would fall within the scope of the definition.
++ The value of taxable services is the gross amount charged by the service provides, i.e., Housing Society.
F.No. V/ST/HQ/TECH/REF-25/06/1596 of the COMMISSIONER OF SERVICE TAX, MUMBAI Dated : March 7, 2006