Service tax for under construction flat

I am planning to buy an under construction flat by entering into agreement of sale (X) and agreement of construction (Y).

We are planning to register only agreement of sale.

 

Builder is charging me

 

  1. Registration charges @ 7.5% on sale deed value (X)
  2. Vat on total cost @ 1.25% (X + Y)
  3. Service tax @ 10.3% on 1/3rd value on agreement of sale (X) excluding land cost
  4. Service tax on Construction agreement (Y) @ 4.12%
  5. Labour cess @ 1% on total construction cost (X)

 

Is this correct ? Should I pay for both point 3 and point 4 ? What about other pioints ?

Replies (7)

Service tax on residential building is totally a complecated area. There are various agencies like developer/promoter/builder/contractor/sub-contractor etc.. involed which the buyer may not be knowing about. Talk to a consultant with complete details rather than seeking clarification on limited input.

read it as 'complicated' . 'clarification with limited input provided'.

he is correct in charging service tax, but for VAT cost should be only 2/3

reagarding labour cess you can negotiate

 

 

I am not registering the agreement of construction. Should I still pay Service tax and VAT on agreement of construction is my question ?

Registration and service tax are mutually exclusive things

Service tax has to be paid to the government. How can I be sure that the service tax on agreement of construction he is asking will be paid by him to government as agreement of construction is not registered.

there is no surety even if it is registered,

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