I am planning to purchase a flat in a building which has only 4 units. The project is due to be complete in 3 months time after which the builder will apply for the occupancy / completion certificate. I have paid token advance and according to the builder no service tax applicable as far as his knowledge goes. However, I have just read that under new Budget even buildings less than 12 units will have service tax applicable, is that true?
My questions are:
1) If so, how can I avoid paying service tax because then the cost will increase by more than a few lacs! Is the new rule applicable for buildings that have started construction long time back as well and are almost complete now or only applicable to buildings that begin construction now?
2) If I manage to convince the builder to pay only after he gets the occupancy / completion certiicate then will I need to pay service tax? I read that it is not applicable if you pay for a completed property.
CAclubindia
