Service tax applicabilty on Subsidy

[Asked by 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

Service tax applicability: builder payments covering maintenance shortfalls constitute taxable consideration unless expressly exempted.
Payments by the builder to make up maintenance shortfalls are treated as consideration for services and are taxable on the gross amount charged unless a specific service tax exemption applies; income tax exemptions do not automatically exempt such receipts from service tax and factual review of contracts and records is required.