Hi having been booked a flat (under construction and position on Apr2011) on 16 Feb 2010 and made 15% down payment to builder, Due some resons registration was not possible upto 31 April. But now registration stated and builder demanding the amount 3.58% of agreement value which is service tax and needs to be recovered from purchaser. Is this amount really ...payable by me to builder or not?
Your reply in this regard is highly appriciated.
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Clarification-needed on service tax levied on flat purchase
Replies (2)
First of all the service tax rate is 10.3% and not 3.58%.
Secondly you need to clarify with your builder that under what heading he is asking you this service tax because if it is only the selling of the flat to you then you are not suppose to pay any tax.
If completion certificate issued by competent authority on purchase immediately,then it will not attract any ST or VAT.If the payment is made progressively with the completion of construction then it will attract ST and bulider can collect it from the prospective buyer( Deemed Service as per the latest Budget.).
Eventhough the ST rate is 10.3% at present the rate will differ according to the sceme the bulider chooses and 3.58% charged appears to be correct.
U ask for the clarification for this to the FM of the builder.
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