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2014 (1) TMI 667 - CESTAT MUMBAIBusiness Auxiliary Service - Management, Maintenance or Repair Service - Sharing of expenditure with group companies - Collection of maintenance charges/deposits from the flat buyers - Held that:- The notice demands tax under clause (ii) of the BAS which relates to promotion or marketing of service provided by the client and under clause (vi) which deals with any incidental or ancillary support service such as billing, collection or recovery of cheques, maintenance of accounts and remittance, inventory management, evaluation of prospective customer or vendor, public relation services, w.e.f. 10/09/2004. By sharing common facilities, the appellant does not promote or market the services of the group companies nor the services rendered can be considered under the category of services incidental or ancillary to the marketing services. In any case, the appellant has been discharging service tax on the said activity under Business Support Services effective from 01/04/2006 and the department has been accepting such payment. Appellant is collecting security/maintenance deposits from the flat owners. Till such time, the flats are actually handed over to the flat owner, the appellant is liable to discharge statutory obligations such as property tax, water charges, electricity charges, etc. under the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, which is a statutory requirement. Since the amount is collected for discharging statutory obligations and amount is utilised for incurring those statutory obligations, it cannot be said that the appellant was rendering management, maintenance or repair service to the flat owners. Further, any excess amount collected, over and above the actual, were reimbursed to the housing cooperative society when the flats were actually given possession and handed over to the flat owners. Thus the appellant was acting as a pure agent and was performing custodial functions. Therefore, the demand of service tax under ‘Management, Maintenance or Repair service' does not appear to be sustainable in law - appellant has made out a strong case in their favour for grant of waiver - Stay granted.
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