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Service tax for purchase of a flat from a builder

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SK Mohanty

Sr Manager Systems

21 Points Posted on 19 December 2015

Dear Sir,

Kindly look into my query and suggest me accordinngly.

1-Builder X has an agreement with Y , a Society of Group of Land Owners for making an Apartment and he has given one flats each to Y Group of peoples.Also made an agreement to sell some flats to outsiders other than the land owners ( Z Category) .

2- I am one of the Z category peoples and bought a flat for Rs 40 lakhs from the Buildedr X.

Payment made between 2012 Oct till 3rd Nov 2015.

What Serve Tax I have to pay to they Builder .

Thanking You

SK Mohanty

I am buying a flat from a Builder X.

Replies (1)

Madhukar N Hiregange

Chartered Accountant

33545 Points Posted on 20 December 2015

Option 1. On the full value either 25% ( less than 1 cr) or 30% x 14.5%

Option 2. On value of undivided interest in land ( preferably indicated in agreement and as per markert value) exlcusion claimed and on balance - construction agreement pay 40%x 14.5%

Option 3. L&T decision. On value on completed portion in addition to 2 above claim exclusion ( alreayd immovable property as on date of agreement) On balance pay 40%x 14.5%.

Normall the builder would have opted for a scheme which is benefecial for him and may not agree to each indivisual coming up with his own ST planning scheme. In last option- the builder may end up with accumulated credits whcih he cannot utilise.