Tax rate
This query is : Resolved
01 November 2013
what is vat rate and service tax rate on newly constructed flat?
Suresh Ramaswamy
(Expert)
04 November 2013
VAT is applicable on sale of goods and commodities. Immovable property is not goods nor is its transfer governed by the provisions of Sale of Goods Act, 1930. Therefore on transfer of land & buildings (including flats) no VAT is leviable.
Service Tax is leviable on services rendered during construction period by the contractor till the issue of Completion Certificate by the Municipal authorities. Once the CC is issued, no further service tax is leviable on the amounts realized by the contractor. The rate of Service Tax is 12.36%. However, contractors are allowed to avail of abatement as under:
(a) If the price of the land is not included in the sale price of the flat and charged separately, abatement of 67% can be availed and service tax would be levied on 33% i.e. @4.079% of the total consideration;
(b) If the price of the flat is inclusive of land price, then:
(i) If the total consideration is less than Rs.2 Crores and the area of each unit is less than 2000 square feet, abatement of 75% can be availed and on the balance of 25% tax is levied i.e @ 3.09% of the consideration; and
(ii) otherwise the abatement would be 70% and on the balance 30% service tax would be levied i.e. @3.708% of the consideration.
Service Tax is leviable on services rendered during construction period by the contractor till the issue of Completion Certificate by the Municipal authorities. Once the CC is issued, no further service tax is leviable on the amounts realized by the contractor. The rate of Service Tax is 12.36%. However, contractors are allowed to avail of abatement as under:
(a) If the price of the land is not included in the sale price of the flat and charged separately, abatement of 67% can be availed and service tax would be levied on 33% i.e. @4.079% of the total consideration;
(b) If the price of the flat is inclusive of land price, then:
(i) If the total consideration is less than Rs.2 Crores and the area of each unit is less than 2000 square feet, abatement of 75% can be availed and on the balance of 25% tax is levied i.e @ 3.09% of the consideration; and
(ii) otherwise the abatement would be 70% and on the balance 30% service tax would be levied i.e. @3.708% of the consideration.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Accounting treatment of AMC alongwith the purchase of Laptop
- Nursery business
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Issuing of delivery challan by seller of goods
- Tax on Amount transferred in HUF Account
- WRONG GSTR7 ENTRIES ACCEPTED ERRONEOUSLY
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
