SERVICE TAX & WORKS CONTRACT TAX

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J SREEKUMAR (Querist)

10 May 2009 I had booked a flat in 2006 with a reputed builder. Towards this an agreement for construction and agreement for sell was executed. The payments were made as per the schedule of the builder. The UDS was registered in my Name while 85% of the construction was completed. Now the builder is refusing to handover the key as i have refused to pay service tax & works contract tax of totalling 4.04% of the construction cost.

Pls inform whether ST & WCT is payable by me as Allottee? If not, how to get the key as I have paid entire consideration of the flat.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

11 May 2009 The real question is that where the builders have already paid the ST to GOVT. then there is no recourse.
In January this year there was a clarification which clarified that there is no ST on residential apartments. Tehrefore builders who had not paid earlier are not required to pay.
Enquire the same with the builder.

BALU V

BALU V (Expert)

11 May 2009 First of all ST and WCT is one and the same. If the total no. of flats exceeds 12 then only there is a question of ST. If the services are rendered prior to June 2007 the ST is payable on the 1/3rd of the gross value minus land value. After that only WCT applies. All the residential flats are not exempted as per the Jan. circular. If need further particulars send PM

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