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CESTAT : Demand unsustainable under Maintenance, Repair service for amount collected from flat owners

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  • CESTAT sets aside demand under Management, Maintenance or Repair Service of building, on amount collected by builder from flat owners as reimbursement of payment made to various service providers
  • Notes assesssee's contention that, assessee neither provided service nor retained maintenance amount, hence, there arises no service tax liability, absent any service element involved; Observes that, collection of such maintenance charges is under statutory provision of Maharashtra Ownership Flat (Regulations of the promotion of construction, sell management and transfer) Act, 1963 (MOFA), which mandates a builder to maintain building before handing over same to society, for which builder seeks such reimbursement; Relies upon ruling in Kumar Beheray Rathi
  • Further, sets aside penalty u/s 78 in respect of liability confirmed under Transport of Goods by Road Agency (GTA) service, stating that, assessee after knowing about non- payment of service tax, promptly paid same along with interest before issuance of show cause notice, hence, there exists a reasonable cause to waive penalty  : Mumbai CESTAT
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Guest Wednesday, 18 September 2019

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