Service tax applicabilty on Subsidy

[Guest]

Hello,

I Have an Issue which is elaborated as follows:-

1.We are running a company which is engage to Common maintenance Services which is rendering to residents of builder.

2.We have raising an invoice to residents for monthly maintenance.

3.However,Few of the residents has not paid their monthly maintenance charges due to Builder has not Fulfill their promises as he said at the time of flat Purchase.

4.In addition to, Most of the flat has Unoccupied in such building.Thus, we have

5.Thus, we have been suffer form heavy losses & unable to pay the remittance of Various Concern vendors.

6.Finally, the concern builder has decided to pay the shortfall amount for remittance to various vendors.

So, My question is that whether service tax is applicable on such payment which is receive from the builder ?

It may seems to be subsidy from builders for running the existing business .

.

AI Summary

Dispute Over Service Tax Applicability on Builder's Payment Covering Maintenance Shortfall Due to Unpaid Fees A company providing maintenance services to residents is facing financial difficulties due to unpaid maintenance fees and unoccupied flats. The builder has agreed to cover the shortfall, raising the question of whether this payment is subject to service tax. Respondents argue that the payment is not a subsidy and emphasize the need for professional consultation to determine tax obligations. They discuss the differences between service tax and income tax, noting that certain services may be exempt from income tax but not from service tax. The discussion references a relevant circular clarifying tax applicability on services.