Service tax on under construction apartment

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21 Points Posted on 04 June 2014

I am in the process of booking a flat with a chennai based builder.

The attached file gives all the details of costing given by the builder

my queries are as below:

1. is service tax applicable on amount towards tneb, cmwssb

2. is service tax applicable on corpus fund being collected by the builder

3. is it correct for me to ask the builder to pass on the amount which the builder will enjoy in terms of CENVAT credit to me.

Probably if i am not clear with my queries pls respond so that i can be more elaborate.

Thanks

Gopal

Attached File : 1293547 1323573 flat price schedule.xlsx downloaded: 157 times

Replies (1)

1245 Points Posted on 05 June 2014

Hi Gopal,

Please note the following -

I believe, no Service tax is required to be paid, because it seems that this an obligatory collection to be made by the builder on behalf of the buyers. Hence, this amount does not reflect the amount collected for provision of construction service. If I am not wrong, the builder would not be enjoying the benefits of such amount collected and would be merely depositing the same in an account in the name of the Co-Operative Society for future benefits.

Please check. Service tax is not being charged on the Corpus Fund; and I agree with this treatment.

No. Builder merely collects Service Tax from you and utilizes the Cenvat credit that he has paid to his contractors. It is already a cost for him to pay to the contractors and hence, he is allowed to use the benefit of set off against the service tax liability charged to you.