Property service tax
This query is : Open
18 June 2012
Hello,
This is regarding purchase of 2 BHK flat.
Booking Date :- 28-Mar-11 Booking amount of 100000/- is debited from my account on 30-Mar-11
Builder Completion Certificate Date :- 31-Mar-11
Sale Agreement Date :- 11-Apr-11
Payment made after agreement :- Approx. 31 Lakhs.
Please confirm in above scenario do I need to pay service tax?
Thanks in advance !!
~Dinesh
This is regarding purchase of 2 BHK flat.
Booking Date :- 28-Mar-11 Booking amount of 100000/- is debited from my account on 30-Mar-11
Builder Completion Certificate Date :- 31-Mar-11
Sale Agreement Date :- 11-Apr-11
Payment made after agreement :- Approx. 31 Lakhs.
Please confirm in above scenario do I need to pay service tax?
Thanks in advance !!
~Dinesh
19 June 2012
Applicability
Service tax will apply in respect of services provided or to be provided on or after 1-7-2010.
Thus, a builder/developer is not liable to pay service tax in respect of services provided upto 1-7-2010. Such bifurcation is possible only if the builder/developer keeps proper accounts and records.
If construction is fully complete before 1-7-2010, no tax is payable as service tax is on provision of service which is the taxable event. Receipt of payment does not decide tax liability.
Valuation
Principally, service tax is payable on value of taxable services.
Thus, if a service provider has proper costing records, it is permissible to deduct value of material and land (or calculate value of service on cost plus profit basis) and pay service tax on value of service @ 10.30%.
If this is not feasible, then tax is payable @ 10.30% on 25%/33% of entire value of contract including material (used by builder plus supplied free of cost by customer), but then Cenvat credit is not available, as explained below.
(a) on 33% of gross amount charged if the gross amount does not include value of land
(b) on 25% of gross amount charged if the gross amount includes value of land (Till 1-7-2010, the 25% scheme was not available. Only 33% scheme was available).
Service tax will apply in respect of services provided or to be provided on or after 1-7-2010.
Thus, a builder/developer is not liable to pay service tax in respect of services provided upto 1-7-2010. Such bifurcation is possible only if the builder/developer keeps proper accounts and records.
If construction is fully complete before 1-7-2010, no tax is payable as service tax is on provision of service which is the taxable event. Receipt of payment does not decide tax liability.
Valuation
Principally, service tax is payable on value of taxable services.
Thus, if a service provider has proper costing records, it is permissible to deduct value of material and land (or calculate value of service on cost plus profit basis) and pay service tax on value of service @ 10.30%.
If this is not feasible, then tax is payable @ 10.30% on 25%/33% of entire value of contract including material (used by builder plus supplied free of cost by customer), but then Cenvat credit is not available, as explained below.
(a) on 33% of gross amount charged if the gross amount does not include value of land
(b) on 25% of gross amount charged if the gross amount includes value of land (Till 1-7-2010, the 25% scheme was not available. Only 33% scheme was available).
19 June 2012
Thanks Dayal,
But as per my knowledge, There will not be service tax for ready Possession flats.
My case is boundary case. one of my part payment ie.booking amount of 100000/- is paid before getting builders completion certificate(Now this is ready possession).
Please confirm in this do i need to pay ST?
But as per my knowledge, There will not be service tax for ready Possession flats.
My case is boundary case. one of my part payment ie.booking amount of 100000/- is paid before getting builders completion certificate(Now this is ready possession).
Please confirm in this do i need to pay ST?
20 June 2012
Please confirm if i need to pay ST on whole agreement value or on just part payment of Rs.100000/-.?
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