DEAR AND RESPECTED ALL
I HAD REGISTERD MY FLAT ON DEC 2009 AND POSSESSION WERE GIVEN TWO MONTH BACK I.E ON 07 AUG 2011. AT THE TIME OF POSSESSION BUILDER IS SAYING TO PAY 3.3% OF SERVICE TAX ON TOTAL COST OF FLAT. HOWEVER I HAVE READ FROM THE NET THAT ABOVE TAX IS APPLICABLE ONLY WEF 01 JUL 2010. THEN HOW BUILDER CAN ASK FOR THE SAME AMOUNT? WHAT SHOULD BE MY COURSE OF ACTION ? SHOULD I CONSULT TO ANY FINANCIAL ADVICER? PLEASE HELP ME IF ANY ONE IN ETAIL ABOUT THIS.
VIKASH KUMAR
Service tax on construction service is leviable from 2005
However wef 1/7/2010 if the entire consideration has been paid before obtaining completion certificate , service tax is not chargeable.
In your case it is not clear
When construction certificate was obtained
When the consideration for flat has been made
Dear Ganesh,
pls reply if you can in following case:-
My Qyery is regarding APPLICABILITY OF SERVICE TAX.
example:- Mr. A paid token money of Rs. 51000/- in January 2011.
He got Architect's certificate of 100% completion in February 2011
Flat registered in March 2011.
Mr. A paid Rs.63000/- to builder in Aug 2011 before getting possession of flat.
is Mr. A was liable to pay this service Tax?
can he claim this Service tax back from the builder.
kindly reply with applicable circulars/notification/applicability to fight with builder for refund of the same.
Thanks & regards,
Daxa Manek
The law has been changing and many builders have not paid, have partially paid differring amounts. The option chosen by builder is also important.
As others have opined, the date of completion would also be important. Also what type of agreement you had with the builder whether 1 compisite for transfer of building or 2 one for immovable property and 1 for construction.
The builder if paying should have been paying reglarly and collected from you along with installments. At times since many cannot understand the complicated tax structure, amounts are collected in the guise of tax. Maybe prooof that he is paying the ST regularly canb be seen.
| Originally posted by : Daxa manek | ||
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Only on the token money ST payable. No payment after completion of construction i.e. for payment made after Feb 2011. |
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Madhukarji,
Thanks for your reply.
how to fight with builder for the same. can you give some circular/notification, as my friend is trying hard but builder is not repaying.
@ madhukar sir,
once the service is taxable , the entire consideration is liable to service tax. Is it correct?
Dear Ganesh, I agree with you, once the service is taxable you will be made liable to pay the service tax tax for the entire consideration..
Dear Daxa,
The service tax liability can not be imposed if the entire consideration was paid after the completion certificate was obtained...
As per the current law - under Sec.66E
"(b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration is received after issuance of completion certificate by the competent authority. "
As per the preivous law, an explanation effective from 01-07-2012, was inserted in the "Construction of Complex Services", wherein it was clarified that no service tax can be imposed in such case.
Dear Vikash,
Good News. If the advances are given prior to 01-07-2010; no service tax can be levied vide Notification No.36/2010-ST dated 28-06-2010.
Hope this is suffice...
CAclubindia
