Maintenance charges collected under statutory obligation were treated as pure pass-through amounts, not taxable maintenance or repair service.

Maintenance charges collected by a builder from flat purchasers under the Maharashtra Ownership Flats Act were not taxable as maintenance or repair service where the builder merely discharged statutory obligations, maintained separate accounts, and passed the amounts on to actual service providers and authorities on a cost-to-cost basis. The builder was treated as a conduit or pure agent, not as a person itself providing maintenance, repair, or immovable property management services. The contrary Revenue view was said to be inapplicable on these facts, including because it did not account for the Maharashtra statutory framework.

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Issues: Whether maintenance charges collected from flat purchasers under the statutory obligation created by the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 were taxable as maintenance or repair service in the hands of the builder.

Analysis: The charges were collected pursuant to the promoter's obligations under Sections 5 and 6 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, which require separate accounting of amounts collected and payment of outgoings until transfer of the property. The amounts were only passed on to the actual service providers and authorities on a cost-to-cost basis. The builder was not itself engaged in providing maintenance or repair service or in managing immovable property, but acted only as a conduit or pure agent. The contrary view relied on by the Revenue was held inapplicable on the facts, including because it did not consider the Maharashtra statutory framework.

Conclusion: The maintenance charges were not taxable in the hands of the builder as maintenance or repair service, and the Revenue's challenge failed.

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