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Service tax on underconstruction flat and st wef ?

Unknown (Sr) (47 Points)

07 July 2013

Hi, I have purchased underconstruction flat in sept 2011, At the time of agreement Builder was not asked about Service Tax but Now in June 2013 he is asking for Service Tax with Inerest from the date of agreement. My question is As per my knwoladge Service tax on construction is wef 1 july 2012. So In this should i need to pay ST for 2 yr from the date of agreement or 1 yr. from the date ST applicable... Also At the time or after 2 yrs of the agreement builder does not inform about Service tax, sudden he is asking for Interest, Kindly suggest should i need to pay interest of tax or not. kindly suggest what action i need to take, How do i need to handel this situtaton. Pls guide me through. Thanks.

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3 Replies

Sumit Pratap Singh (Accounts Officer) (48 Points)
Replied 07 July 2013

Dear Abhiv Construction of flat is taxable from 2010 onwards. Thus builder is right in respect of taxability. In respect your query regarding interest on Service tax, you should discuss with your builder, that service tax collection & deposit it with govt is the liability of builder. Builder has not collected Service Tax from you in timely manner, thus he is liable for payment of interest. Sumit Pratap Singh 9716464744

Unknown (Sr) (47 Points)
Replied 07 July 2013

Thanks for info sir, suppose builder not agree on same then what action do i need to take.... u know all builder :)

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 07 July 2013

Originally posted by : AbhiV

Hi,

I have purchased underconstruction flat in sept 2011, At the time of agreement Builder was not asked about Service Tax but Now in June 2013 he is asking for Service Tax with Inerest from the date of agreement.

My question is As per my knwoladge Service tax on construction is wef 1 july 2012. So In this should i need to pay ST for 2 yr from the date of agreement or 1 yr.
from the date ST applicable...

Also At the time or after 2 yrs of the agreement builder does not inform about Service tax, sudden he is asking for Interest, Kindly suggest should i need to pay interest of tax or not. kindly suggest what action i need to take, How do i need to handel this situtaton.

Pls guide me through.

Thanks.

Normally if the agreement did not have a clause on ST there is no liability to you as ST was liable from the past. Contract overrides who pays the tax. Primary liability is oin the builder. You may contact a good advocate.

Alternatively ASk builder to provide proof that he is registered and has paid the service tax which he is demanding over a period. Interest anyway is not liable.