A.C.A.
155 Points
Joined May 2010
Dear All,
Yes, there is a specific purpose of referring his query.
A Builder Sells a Flat on which as per recent amendment, MVAT is applicable @ 1% of cost of Flat. I guess w.e.f 1st April 2010. As per definition in the respective laws a Builder is referred as a Vendor (who sells flats thus liable for VAT)
Now as per recent amendment w.e.f Dt. 01-07-2010 in Service Tax Laws. Service Tax is levied @ 10% + Edu = 10.3% on 25% of Cost of Flat. Now in the Service Tax Laws a Builder is referred to as Service Provider. (Though Interim relief-Stay has been granted by the Hon’ble Bombay High Court, but still the assessment and its collections continue as per order of the Hon’ble Bombay High Court - though it is not deposited to the department)
Now a Builder Sells Flat suppose @ 50 Lacs. He adds 1% Vat on this amount i.e. Rs. 50,000/- and again as per service tax amendment he is required to add Service tax which amounts to Rs. 1,28,750/-
I found this provision conflicting that’s why I have posted the above query. Can you give your opinion on this subject i.e. how on one hand it is treated like sale of goods and the same thing is also treated as providing services?
If this example is continued, Tomorrow we may be charged VAT on Phone, Courier Bills, Professional charges charged by us & similarly Sale of goods will also be treated as providing services and service tax will be levied on that sales?