Post Budget 2012, the eligibility of a Society for Service Tax collection and remittance can be calculated as below:
Step1: Total all collections of last year, subtract collections that went towards payments to local authorities (e.g., payments to Municipality) = Rs.A
Step 2: Find the number of Members in your Society (If one Owner has 3 flats, he is one Member). In most societies total number of Members will be less than the total number of Flats as one Owner may have multiple flats. Let’s say total number of Members = M
Step 3: Now find what is the total exemption (Rs.E) your Society has:
Rs.5000 * M * 12 = Rs. E
Step 4: Rs. A – Rs. E = Taxable Income of your Society
If this Taxable Income is more than 10Lakh, your Society needs to get registered under Service Tax.
Please note: This is an interpretation of the Service Tax changes in the Budget. Please consult your Auditor to ensure his interpretation matches the above.