Service tax on booking amount of flat or shop

8893 views 6 replies

 

Dear Expert

 

Kindly update 

after 1.07.11 Do service tax is applicable on booking amount of flat , when there is no sure that flat will be alloted to client or not or buyer has option to cancel the booking before the allotement.

 

Is there any option to charge service tax on booking amount after identification of flat or allotment by reverse calculation and pay to govt afte allotment of flat

thanks

Replies (6)

Kindly note that there isnt any specific note that service tax is payable on booked flats but it is said that assessee has to pay s.tax on advance against booking and not on allotment.

If that advance receipts are canceled and it is given to any other person then credit of the same amt paid under section 6 in return as well note that the notification is from 1-7-2010 and not 2011.

Tax is payable on booking amount as well unless the same is accounted for as a refundable deposit. It is advisable to pay tax on reverse working and if flat is not allotted, refund the amount to party and take credit of tax paid as per Rule 6(3) of ST Rules.

it is better to allocate initial booking amount towards non taxabable services, so that we can avoid this situation. most of the builders are allocating initial booking amount towards land cost.

it is better to allocate initial booking amount towards non taxabable services, so that we can avoid this situation. most of the builders are allocating initial booking amount towards land cost.

IS SERVICE TAX IS APPLICABLE ON ADVANCE BOOKING AMOUNTS OF FLATS?  IF APPLICABLE THEN WHICH AMOUNT  AND WHAT RATE ?

Service Tax is payable on advance paid for booking of flats.

As per Notification Number 26/2012 : service tax is to be paid @ 12.36% on 25% of the amount paid.

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