Discuss whether service tax is leviable on the monthly contribution collected from members to be used by residents welfare association for the purpose of making payments to the third parties in respect of commonly used s

In a residential complex, monthly contributions collected from members, used by the Resident Welfare Association (RWA) for the purpose of making payments to the third parties, in respect of commonly used services or goods like, for providing security service for the residential complex, maintenance or upkeep of common area and common facilities like lift, water sump, health and fitness centre, swimming pool, payment of electricity bill for the common area and lift, etc are exempted from service tax. This is vide Notification No. 25/2012-ST which specifically exempts service provided by an unincorporated body or a non-profit entity registered under any law for the time being in force such as RWAs, to its own members. However, a monetary ceiling has been prescribed for this exemption, calculated in the form of five thousand rupees per month per member contribution to the RWA, for sourcing of goods or services from third person for the common use of its members.