Service tax on residential flats

I had purchased semi finished flat on November, 2010 at Hyderabad, the Registered sale deed for Rs.11,50,000. And entered with Agreement of completion of balance works of semi finished flat , purchased on Now, 2010 for Rs.12,17,400/- (Unregistered agreement, dt.November,2010). Total cost of the flat Rs.23,67,500/-.

Total residential flats 28, each 1050 sft. (Project completed 31.03.2012) Now the builder demands to pay service tax of Rs.72,000 for each flat. Is the flat owners are liabile to pay service tax ? If liabile, on which amount to pay the tax ?

The builder originally purchased the land in the year 2009 on their firm name with AGREEMENT OF SALE CUM GPA, AS MENTIONED IN THE SALE DEED. 

Kind request for valued reply.

Thank u one and all

Replies (1)

Dear Shekar,

I couldnot understand your query exactly. I felt there are two purchases as per your query.

If the builder himself constructs more than 12 residential units and sells them to a third pary then service tax is applicable and flat owners are liable to pay service tax

But you have given a contract to complete/construct a residential flat then service tax is not applicable.

Hope your query is resolved.

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