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Service tax payable on market value or agreed value of flat

anand dilip bagade (PROPRIETOR) (96 Points)

27 July 2015

If agreed value of a under construction residential flat to be purchase is Rs.25 lakhs and government Value (Market Value) of the same flat is Rs.28 lakhs, then service tax is to be paid on which value?

Is it true that "Service Tax is not applicable for low cost housing with carpet area of upto 60 sq. mt. per house in the housing complex but subject to approval from concerned authorities".

Please see attached article on these two issues.

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1 Replies

Kashish Gupta (B.com (H) , ACA) (368 Points)
Replied 27 July 2015

Service Tax will be paid on 25 Lacs. However, if benefit of EN 26/2012 is obtained, 25/30% of Rs. 25 lacs is the taxable value and tax @ 14% is payable on this value. (if Point of Payment is after 31.05.2015 i.e. on or after 01.06.2015). Doing so, service provider cannot avail CENVAT Credit of service tax paid on Inputs.

25/2012 exemption is available if housing project is approved by competent authority empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India.