07 December 2011
I am purchased flat from Builder, Agreement Value is Rs. 2010000 and Development Charges Rs. 67000/-. Now Builder send me Demand Letter for Service Tax @ 2.257% on Total Consideration of Rs. 2077000/-. My Query is as under
1. Service Tax is applicable for Development charges or not 2. If Yes or No Pls provide me section or link so i can send it to my builder
10 December 2011
Purchase of flat does not amount to service tax as there is no services provided by builder.Construction or related services provided by builder will attract service tax. So u have to check that whether u have simply purchased the flat or as per agreement u get the construction of flat. If u got the flat constructed then if development charges includes completion or finishing services then it will be taxable.
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