Case Law Details
ATS Township Pvt. Ltd. Vs Commissioner Central GST (CESTAT Allahabad)
The issue relates to inclusion of the amount collected by the appellant as Interest Free Maintenance Security (IFMS). Revenue’s contention is that the said collected amount would fall under the category of ‘Management Maintenance and Repair Services’ and would be liable to service tax separately.
We note that the said amount collected by the appellant from the flat owners is towards the security for the purpose of maintenance of the building and to cover the eventual default made by any of the flat owners for payment of monthly maintenance charges. As per the agreement with the flat owners, the said amount is liable to be refunded to them within the period of Six months from the date of termination of the said agreement. The Adjudicating Authority observed that the genuineness of the said term is very much doubted inasmuch as the appellant had not produced any evidence to show that the said IFMS was ever refunded to anyone. We really fail to understand the said reasoning of the Adjudicating Authority. The amount is refundable in case of termination of the ownership agreement and if no such termination has taken place till date, the amount would not be refunded. As long as the provisions for refund of the said amount in the agreement itself is there, it has to be considered that the said amount is refundable and was towards security deposits and was not for the purpose of providing any services, so as to levy tax on the same.
FULL TEXT OF THE CESTAT ALLAHABAD ORDER
After hearing both the sides duly represented by Shri Kapil Vaish & Shri Ashish Vaish, learned chartered accountant appearing for the appellant and Shri Rajeev Ranjan, learned A.R. appearing for the Revenue, we find that the appellant is engaged in providing taxable services under the category of “Construction of Residential Complex” and is duly registered with the Service Tax Department for the said purpose.
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