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CESTAT : Maintenance deposit collected by builder before society formation non-taxable; Follows earlier ruling

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‘One-time maintenance charges’ collected by builder-assessee from flat purchasers not exigible to service tax u/s 65(105)(zzg) of Finance Act as “maintenance or repair services”; Relies on earlier ruling in case of Kumar Beheray Rathi & others, where co-ordinate bench observed that builders / developers act only as trustees / pure agents of flat owners’ funds and cannot be held as providers of maintenance or repair service; Co-ordinate bench ruled, builders pay on behalf of customers / flat owners, to various authorities like Municipal Corporation and service providers such as security agency & cleaners and do not charge anything of their own; Moreover, deposit account shifted to flat owner's Co-operative Society upon formation as per statutory obligation under Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 : Mumbai CESTAT

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Guest Wednesday, 18 September 2019

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