Service tax rates on immovable property

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Hello Everyone,

          I have a quire regarding payment rate of service tax on immovable property. I have booked  a flat in Mumbai with reputed builder. Paid the agreement amount of 20 lakh in December 2011 of which 10 lakh written in agreement as earnest money and other 10 lakh distributed as installment on work progress. Six (6) lakh on basement foundation and 4 lakh on Plinth. Now builder is demanding to pay service tax with rate as follows, 2.575% on 16 lakh and 3.09% on 4 lakh because the demand for installment  of plinth payment  is raised in April 2013. Do I have to pay the tax for 4 lakh as per new rate of 3.09% though I have done payment in 2011? Nothing is mentioned in the agreement about  interest to be paid by builder for delay in work or unused amount lying with him.

Replies (1)
By the Finance Act 2007, the Central Government has extended the levy of service tax on hiring of property also with effect from 1.06.2007. For the purposes of this clause, “for use in the course or furtherance of business or commerce” includes use of immovable property as factories, office buildings, warehouses, theatres, exhibition halls and multiple-use buildings. You can also claim deduction on payment of property taxes, if it has been duly paid. Sell House Fast Fast House Sale


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