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January 2016

[2015] 63 taxmann.com 20 (Mumbai – CESTAT) Hiranandani Constructions (P) Ltd. vs. Commissioner of Central Excise, Thane-I

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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Maintenance Charges collected by builders from prospective buyers for payment of local taxes and other charges would not attract service tax.

Facts
The adjudicating authority held that the maintenance charges recovered from the prospective flat buyers towards management, maintenance or repair service are liable for service tax.

Held
Relying upon decision of Tribunal in the case of Kumar Beheray Rathi vs. CCE [2013-TIOL-1806-CESTAT-MUM] and Goel Nitron Constructions vs. CCE [2015-TIOL-1787- CESTAT-MUM], it was held that no service tax liability arises on the appellant under the category ‘Management, Maintenance or Repair Service’ for the amounts collected by them from the prospective flat owners.

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