Service Tax by RWA

The housing societies or resident welfare societies have quite a lot questions with respect to the service tax. There is a new comprehensive circular by Service Tax department to clarify the doubts with respect to the service tax. 


Please find the circular available at the following location:


The circular is self-explanatory. We however would make some key observations in plain English:


  1. The circular covers the services tax with respect to payments by the members to the society.

  2. The society is liable to charge service tax in case the society receipts of the taxable services are more than 10 lac per annum.

  3. In case the society charges / collects service tax, it has to deposit the same with the service tax division.

  4. If a member pays less than Rs 5000 towards the taxable service per month to society, the member is not liable to pay the service tax.

  5. If a member pays more than Rs 5000 towards the taxable services per month, the entire amount if liable for the service tax.

  6. The electricity bill raised by the society for the consumption inside the member’s houses can be considered non-taxable (there is some ambiguity in the wording, but this would be the right explanation considering the spirit of the circular).

  7. The common area electricity (CAE) charges are not exempt from the service tax. They however would come under Rs 5000 taxable service limit per month.

 It is also important to list the services which are taxable or exempted. The exempted services include: 

  1. Municipal Tax

  2. Share money

  3. Water Charges (except for common use of the society like garden etc.)

The Taxable Services include: 

  1. Club membership fees

  2. Share transfer fees  

  3. Maintenance Contribution
  4. Contribution towards Sinking Fund / Repair Fund etc.


Add comment

Security code

Additional information