Question: Is Service Tax Applicable On Maintenance Charges Collected By Builder

It is true that there is no Service Tax on maintenance charges paid for maintenance of common areas in apartment complex upto the service charges for Rs However, it seems that builder has collected service charges and service tax in cash without raising bill and furnishing receipt for the amount received 2

Can builder collect maintenance?

Yes Maintenance charges are compulsory in every new apartment It is an integral part of the contract between the builder and the buyer After the buyer pays the booking amount for the apartment, the builder issues an allotment letter by mentioning the maintenance charge

Can builder charge GST on monthly maintenance?

The builder charges 18%GST on monthly maintenance charges ,which is around Rs 4000/- per month As per GST guidelines no GST up to Rs 7500/- pm on maintenance charges The builder says ,its applicable for building having welfare association only

Can builder charge GST on advance maintenance?

Charges collected by real estate developers, other than for construction services, such as those for utilities and maintenance will attract 18 per cent GST, ruled Maharashtra’s Authority for Advance Ruling

What maintenance charges include?

Maintenance charges are the cost of living in an apartment which is apart from stamp duty and registration cost and these maintenance charges are calculated mainly based on the area of property and quality of maintenance

When builder can charge maintenance?

The builders may ask for 12 months, or 24 months, of maintenance charges in advance at the time of possession Once handed over to the RWA, the frequency of collecting the maintenance charges is decided by it “It is the residents’ right to be aware of the amount spent by the builder on maintenance

Do builders pay maintenance for unsold flats?

The maintenance charges have to be paid by all the owners, whether the apartments are occupied or not The maintenance charges for unsold flats should be borne by the builder till they are sold, and thereafter by the purchasers

Is GST applied on service charge?

So, as per law, Service Tax has been phased out by GST and customers are not supposed to pay it

Is GST applicable on repairs and maintenance?

The Central Board of Indirect Taxes and Customs (CBIC) notified that 5% GST payable Maintenance, repair, or overhaul services in respect of ships and other vessels, their engines, and other components or parts

Is GST applicable on other charges collected by builders?

However, under GST a single rate of 12% is applicable on under construction properties whereas no GST is applicable on completed or ready to sale properties only if the Completion Certificate (CC) has been issued

Is TDS applicable on maintenance charges?

TDS on maintenance charges is required to be deducted under Section 194C of Income Tax Act 1961 at the rate of 1% or 2% (as the case may be) for payments to residents

Are maintenance charges tax deductible?

Further, when Income is calculated under the head House Property, then besides statutory deduction of 30% u/s 24, an assessee is entitled only for deduction with respect to taxes levied by any local authority Flat No Maintenance Charges (Rs) Municipal Taxes (Rs) Total 1,68,072/- 2,06,028/-

What advanced maintenance?

This is charged for a certain period (1 year or 2 years for example) These funds are used maintenance of the project towards expenses like common area maintenance, repairs, common area electricity, lift maintenance salaries of security etc

Is property tax included in maintenance fee?

Your monthly maintenance fee pays for the building’s operating costs, any underlying mortgage, and importantly (unlike condos) includes your property taxes

How are maintenance charges calculated?

Your maintenance charges will depend on the total number of square feet in your apartment For example, if the committee decides to levy Rs 2 per square feet and your apartment is 600 sq feet, you will pay Rs 1200 But if your apartment is 1200 square feet, you will pay Rs 2400

What is included in service charges for flats?

1 What is the service charge? Each year, you pay us a service charge This money goes towards the day-to-day running costs of your development and is used to cover items such as buildings insurance, maintenance, repairs, gardening and communal facilities, as well as for any staff that might work at the development

Can builder charge maintenance without OC?

Answers (1) No, the said builder is not eligible to claim maintenance before the completion of the total facilities First he is required to complete everything then he can ask for the maintenance charges Also, if you want to, then you can file a complaint in the consumer forum for deficiency in services

How do I collect unpaid maintenance?

Maintenance money can be collected from the owners at the time of selling their apartment by insisting them to obtain NOC from Owners’ Welfare Committee which will be a pre-condition to sell their flat and for obtaining NOC , they have to pay upto date maintenance money without any due and only then they are permitted

What is the rule for society maintenance charges?

Expenses on repairs and maintenance of building of Society These charges may be decided by General Body subject to minimum 075 percent (075%) of the cost of construction of flat/shop per annum For example, if the construction cost is Rs 1200/- per sft, this charge will be Rs 9,000/- per annum for a 1000 sft flat

Is it mandatory to pay maintenance charges?

According to the Real Estate (Regulation and Development) Act, 2016, “every allottee, who has entered into an agreement for sale to take an apartment, plot or building shall be responsible to make necessary payments within the time as specified and shall pay the share of the registration charges, municipal taxes, water Jan 22, 2021

How are flat maintenance costs calculated?

Per sqft charge Per sq, ft method is extensively used for the calculation of the maintenance charges for the societies On the basis of this method, a fixed rate is levied per sq ft of the area of the flat If the rate is 3 per sq ft and you have a flat of 1000 sq ft then you will be charged INR 30000 per month

What if society member is not paying maintenance?

If a flat-owner fails to pay his maintenance on time then the society can initiate legal proceedings to recover the maintenance amount In such an application, the society will request the Registrar to issue a certificate for recovery of the amount against the defaulting member (flat-owner)