No Service tax liability arises under the category of ‘Management, Maintenance or Repair service’ for the amounts collected from the prospective flat owners
Hiranandani Constructions Pvt. Ltd. Vs. Commissioner of Central Excise Thane-I [2015-TIOL-2135-CESTAT-MUM]
Hiranandani Constructions Pvt. Ltd. (“the Appellant”) had collected an amount from the prospective flat buyers towards for maintenance of the units sold to them till the prospective buyers come together and form a cooperative hosing society. The said amount was collected in terms of the provisions of Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management & Transfer) Act, 1963.
The Adjudicating Authority held that Service tax liability would arise on the amount so collected by the Appellant from the prospective flat buyers under the category of ‘Management, Maintenance or Repair service’.
The Hon’ble CESTAT, Mumbai held that the above issue is squarely covered by the judgment of Hon’ble Tribunal in the following cases:
- Kumar Beheray Rathi Vs. Commissioner of Central Excise, Pune III [2013-TIOL-1806-CESTAT-MUM], and
- Goel Nitron Constructions Vs. Commissioner of Central Excise, Pune – III [2015-TIOL-1787-CESTAT-MUM]
Wherein, it was held as under:
- Appellant cannot be held as provider of maintenance or repair service as they are only paying on behalf of various buyers of flats to various authorities (Municipal Corporation, Revenue authorities etc.) and various service providers (such as security agency, cleaning service providers etc.) and they are not charging anything on their own.
- The payments are made cost on cost basis and the same is debited from the deposit account.
- Appellant act only as trustee or as pure agent for the stated amount.
Hence, the Hon’ble Tribunal accepted the contention of the Appellant and disposed of the liability of Service tax thereon.