CA Mukund Abhyankar
Introduction:The issue of the imposition of service tax on construction and sale of residential property has long been a matter of concern for the real estate and construction industry as well as for buyers of such residential property. It has gained much prominence after Budget 2010 because of significant amendment made therein towards taxability of sale of flats under service tax.
A ‘deemed service’ provision has been introduced in case of construction service w.e.f. 1-7-2010. Any industrial or commercial construction or construction of residential complex will be subject to tax if such complex or part thereof is sold prior to obtaining ‘completion certificate’. Consequently, installment purchases of immovable property will become chargeable to the service tax.
Notification no. 24/2010 dated 22 June 2010 has specified the effective date of operation of certain provisions of the Finance Act 2010, which include subject amendment, to be 1 July 2010.
Since the subject amendment is made by way of an ‘Explanation’, added to the Definition of service & since this Explanation is not merely for explaining or clarifying the scope but for expanding the scope of taxable service, it can be safely interpreted that this amendment can not have retrospective effect prior to 1-7-2010.
Following players in real estate sector will get affected by the Amendment.
A pure Developer/Builder, who might have outsourced or contracted out the construction activities to a Contractor, in the case of a civil works contract.
A Developer/Builder cum Contractor, who undertakes the construction himself and consequently doubles as a Contractor.
It needs to be noted however that a contractor engaged by the builder for the purpose of construction of commercial or residential complex is anyway liable to pay the service tax under the relevant taxable category. Dispute was only in respect of the liability of the builder to pay the service tax on sale of a flats during construction to the prospective buyer. Recent amendment brings into service tax net, transactions of sale effected by builders and developers.
Pre-budget 2010 provisions in respect of construction service
Service tax provisions relating to construction cover three types of services –
i. Commercial or industrial construction which is taxable w.e.f. 10-9-2004
ii. Construction of complex (residential complex of more than 12 residential units) which is taxable w.e.f. 16-6-2005.
iii. If sales tax/VAT/works contract tax is payable on these construction activities, related services get covered under ‘works contract service’ w.e.f. 1-6-2007 and not under first two categories of services.
As far as sale of flats by builders is concerned, it was more or less settled, on basis of Court decisions and CBE&C circulars, that a builder entering into contract for sale of flat or industrial unit (gala) or shop or a developer entering into contract for construction of an individual flat for personal residential use of client are not liable to pay service tax.
As a result where agreements are made with the prospective buyers, builders were mostly out of service tax net because in such cases it was considered that no service is rendered.
Changes made in Budget 2010
In the Finance Act, 2010, an Explanation has been added w.e.f. 1-7-2010, to definition of commercial or industrial construction and construction of residential complex, as follows –
Explanation.— For the purposes of this sub-clause, construction of a complex which is intended for sale, wholly or partly, by a builder or any person authorized by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or a person authorized by the builder before the grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer.
Similar Explanation is added In case of commercial or industrial construction service, where in place of word complex, the words used are ‘construction of a new building’.
As a result of this Explanation, an activity which is not ‘service’ as per Court decisions and CBEC’s own earlier circulars will now be a ‘deemed service’ for purpose of levy of service tax, under above two categories of services.
Effect of the changed Provisions
It is important to note that extension of scope in the definition of taxable service has been made only in respect of commercial or industrial construction and construction of residential complex service, leaving works contract service un affected by the change.
For the two services covered, service tax will now be payable in cases of sales of flats/shops/galas, unless such sales are made & entire consideration is received after Completion Certificate is obtained for the property sold.
Time for obtaining completion certificate thus becomes a key factor in determining taxability of sales of flats under service tax.
Requirement about Completion Certificate is however somewhat relaxed under the Service Tax (Removal of Difficulty) Order, 2010, made effective from 1.7.2010, whereby it is provided that such Certificate can be obtained either from
1. Any Government Authority including Local Authority
2. An Architect registered with the Council of Architecture
3. Chartered Engineer
4. Licensed surveyor of the respective local authority
Thus even after the amendment, to remain out of service tax net, a builder need not wait for sale of flats till Completion Certificate is obtained from Local Authorities but instead can obtain such certificate from an Architect or Chartered Engineer and can still avoid charge of service tax.
In all other cases, where such completion certificate is not obtained before sale of flats, the builder will be liable to pay the service tax. In most of the cases, builder constructs building by using funds from prospective buyers, paid by them on the basis of Bookings made for major part of such building before its completion. Thus except for few flats reserved for sale at higher price on ready possession basis, for most of the flats sold, service tax will become applicable.
Exclusion of Works contract service from the Amendment
As discussed above, even after the amendment, what is deemed to be a service is only construction of commercial buildings or residential complexes. This is because Amendment inserting Explanation is not made in the definition of works contract service, but only in other two construction related services.
The amendment therefore does not apply if the contract is covered under works contract service i.e. where Vat/Sales tax is payable on the contract.
Thus if a particular construction activity by a builder is covered under VAT provisions, service tax will not be payable on such construction even after the amendment. Pre Budget legal position about non applicability of service tax in case of sale of flats will therefore still hold good even after the amendment in case of works contracts for construction.
Exclusion when construction service is provided for personal use of buyer.
Residential complex for service tax purposes does not include a complex which is constructed by a person directly engaging any other person for designing/planning/construction and is intended for personal use as residence by such person. The definition also explains that personal use includes promoting use of such property as residence by another person on rent or even without consideration.
In this connection, National Building Construction Corporation Limited (NBCC) requested the CBEC for a clarification on the applicability of service tax on construction of residential houses for Central Government employees.
In this case Ministry of Urban Development (GOl) has directly engaged the NBCC for constructing residential complex for central government officers. Further, the residential complexes so built are intended for the personal use of the GOI which includes promoting the use of complex as residence by other persons (i.e. the Government officers or the Ministers).
As such the GOl is the service receiver and NBCC is providing services directly to the GOl for its personal use. Therefore, as for the instant arrangement between Ministry of Urban Development and NBCC is concerned, Board has clarified vide F.No.332/16/2010-TRU Dated: 24, May 2010 (after the Budget 21010 Amendment) that the service tax is not leviable.
In the above clarification, if NBCC and Government are replaced by builder and individual buyer, it would mean that if an individual buyer is buying the property for his personal use from builder, then the transaction of sale is not covered under Service Tax. Clear clarification from CBEC is required on this interpretation, because the clarification referred to above has not been placed by CBEC in public domain.
Transitory provisions in case of bookings made/agreements executed prior to 1.7.2010
Date of booking is not relevant.
Date of provision of service is relevant as provision of service is the taxable event. Hence, if construction service is provided after 1-7-2010, service tax will be payable.
Transitory provisions in case of constructions started prior to 1.7.2010
If the construction is partly complete on 1-7-2010, service tax liability shall be ascertained as under.
Principally, provision of service is the ‘taxable event’, i.e. services provided after tax is imposed will be taxable. Thus, service tax will apply in respect of services provided or to be provided on or after 1-7-2010.
Receipt of payment or advance is not relevant for determining tax liability. Thus, a builder/developer is not liable to pay service tax in respect of services provided unto 1-7-2010. Such bifurcation is possible only if the builder/developer keeps proper accounts and records.
Running bills can be issued in respect of services provided up to 1-7-2010, backed by a Certificate from Architect/Chartered Engineer regarding stage of completion of construction covered by such bills raised.
Transitory provisions in case of advance payments made by the customer prior to 1.7.2010
A specific exemption from service tax has been provided for advances received prior to 1.7.2010 vide Notification No. 36/2010 dt. 28.6.2010. As per Notification service tax is not payable on the amount of advance payment received before the 1.7.2010, for taxable services to be provided, on or after 1.7.2010.
Thus exception has been made for the advances received from the customers before 1.7.2010, even though construction service related to such advances is to be provided after the service has become taxable.
It should be noted however that this exemption is limited to amounts received as advance before 1.7.2010. For all subsequent advances liability will arise towards service tax as per normal provisions.
Service tax is payable on receipt basis and hence as one gets payment for construction service from customer, one has to pay service tax on that amount. If service tax is not shown separately in bill or amount received, the amount received should be taken as inclusive of service tax and then back calculations may be made.
Rate of service tax
Service tax is payable on gross value of taxable services @ 10.3% (Service tax 10%, plus education cess of 2% plus SAH education cess of 1%).
Basic exemption for service tax
The exemption is Rs 10 Lakhs in first year of taxable service counting from 1-7-2010. If turnover in 2010-11 exceeds Rs 10 Lakhs, then there is no exemption and tax is payable on all services from 1st April 2011 onwards.
Valuation of service & Calculation of Service Tax Liability for a Builder/Developer
Principally, service tax is payable on value of taxable services. Thus, if a service provider has proper costing records, it is permissible to deduct value of material and land (or calculate value of service on cost plus profit basis) and pay service tax on value of service @ 10.30%.
Developers and Builders have following alternative methods available under the service tax law for payment of service tax liability.
If the service is covered under service of construction of commercial buildings or residential complexes, builder can opt for Abatement Scheme applicable to these services, under which service tax is to be paid on 25%/33% of the gross value received, in terms of Notification 1/2006. Alternatively, they can opt to pay service tax under Notification No. 12/2003-ST dated 20-06-2003, as per which, the service provider is exempted from paying service tax on the value of goods sold/transferred. The benefit of this Notification is very much available to Developers/Builders/Works Contractors.
With effect from 1.7.2010, any person providing taxable service of commercial or industrial construction or construction of residential complex (except completion and finishing services like glazing, plastering, painting, tiling, wood and metal joinery and carpentry, swimming pools, acoustic applications etc.) can opt to pay service tax as follows
(a) on 33% of gross amount charged if the gross amount does not include value of land
(b) on 25% of gross amount charged if the gross amount includes value of land (Till 1-7-2010, the 25% scheme was not available. Only 33% scheme was available).
The ‘gross amount’ should include value of goods and materials supplied or provided or used. Thus, if the customer provides some material, its value will have to be added for purpose of payment of service tax.
Conditions for this concession are
(a) No Cenvat of duty/service tax paid on inputs, input services and capital goods and
(b) No benefit of Notification No. 12/2003-ST dated 20-6-2003
If a project is covered under Works Contract service, (where VAT is paid) the Realty players can opt to pay service tax either under Notification No. 12/2003-ST dated 20-06-2003, or under the Composition Scheme, applicable to works contractors.
Though the Department has been taking a view that the benefit of Notification 12/2003-ST dated 20-06-2003 cannot be extended to Developers and Builders, the Bangalore CESTAT, in the case of Sobha Developers Ltd v. CCE & ST (2009-TIOL-1188-CESTAT-BANG) has categorically held that the Developer is entitled to the benefit of Notification No. 12/2003. The service provider can have benefit either under Notification 12/2003-ST or 1/2006-ST and not both.
Important aspects for choice between the Alternatives available to Builder for Payment of Service Tax
Comparative features of different alternatives are as under.
| Issue | Abatement Scheme-Notn. 1/2006 | Notification No. 12/2003 | Works Contract-Composition Scheme |
| Criteria for Applicability/Selection | Construction service | Construction Service or Works Contract Service | Works Contract Service |
| Inclusion of Land Value in the valuation for the purposes of service tax | Yes if Abatement is of 75 % |
No if Abatement is of 67 %NoNoTaxable amount on which ST leviable25%, /33 % of Gross ValueGross Value Less
value of goods & Land used in the Provision of Service40% of Gross ValueEffective rate of service tax2.575%, from date of notification10.30 % on the Net Value attributable to service4.12%Availability of Cenvat credit on service tax paid on input service?NoYesYesAvailability of Cenvat credit on excise/CVD paid on capital goods?NoYesYesCommunication about selection of option to the DepartmentNoNoYesWhether service tax is payable on Free Issue Material ValueNot clearNoYes, in respect of contracts the execution of which has already started on or after 1-7-2009
Options of Abatement/Composition or Notification 12/2003 are available in respect of each of the contracts. It can be said that there are as many works contracts as there are flats, in a housing project.
As for choice between the alternatives, Developers who have contracted out the construction activity can find Notification No. 12/2003 or the Composition Scheme for Works Contractors more beneficial looking at significant benefit arising out of availment of CENVAT credit.
The 25% scheme is simple but the liability of service tax will be high, particularly at places where land costs are very high. Further Cenvat credit of service tax paid to contractor/sub-contractor is not available.
Different options for different contracts can be adopted depending upon the amount of tax liability under each option.
Each contract can be treated as separate contract and valued differently.
Service tax liability on consideration received from Landlord
Where land is received from the land owner by the builder in consideration of some flats/galas to be given later in lieu of the land, service tax is payable on the value of flats offered to the landlord.
As soon as builder gets possession of land from land owner, it is ‘advance received’ and service tax will become payable next month.
In such case, value of service will have to be found out on basis of value of service of identical or similar flat/shop or on basis of cost of construction plus reasonable profit.
Provisions with respect to Cenvat Credit
Cenvat credit on construction activities of one project can be adjusted towards output service tax on sale of another project, provided both the projects are not covered under composition option (25%/ 33%).
As per rule 6 of Cenvat Credit Rules, Cenvat credit is not available if output service is exempt from service tax. Subject to this restriction, Cenvat credit among various projects is indeed inter-changeable, particularly if one opts for centralized registration.
Credit of service tax paid on various input services like telephone, courier, mobile, bank charges, audit, security, catering etc can be utilized against service tax payable on construction services. However if certain projects are covered under composition option, pro rata credit will get disallowed as per provisions of rule 6 of Cenvat Credit Rules
Refund of Service Tax on Booking Cancellation
If Service tax has been charged to customer on the basis of booking and deposited with department & later on booking is canceled by the customer, refund of service tax paid earlier can be made to him.
Amount of service tax so refunded can be adjusted against the subsequent payments of service tax. As per rule 6(3) of Service Tax Rules, if excess tax is paid, in respect of service which is not provided either wholly or partially for any reason, the excess service tax paid can be adjusted against service tax payable for subsequent period, if the value of services and tax thereon is refunded to the person from whom it was received.
Registration
A builder can either take separate service tax registration for each project or have centralized registration after studying pros and cons. If proper records etc. are kept, centralized registration will be preferable. It may be advisable to register each project separately in following cases – (a) If some services are exempt and some taxable or (b) valuation basis for each project is expected to be different,.
Tax payable only by a Builder
If a customer who has purchased a flat/commercial unit/industrial gala/shop from builder/developer, sells it before Completion Certificate, such sale is not laible under service tax.
The words used in the ‘Explanation’ are ‘by the builder or a person authorized by the builder’. A customer is not a person authorized by builder to enter into contract for construction. Hence, a customer cannot fall within that definition.
Even otherwise, service tax is payable on value of taxable service which has already been paid by builder/developer. Even if the customer sales the flat or unit or shop at higher price, it does not mean that cost of construction has increased.
Preferential location and development of complex’ service
As per section 65(105) (zzzzu) of Finance Act, 1994, any service provided or to be provided, to a buyer, by a builder of a residential complex, or a commercial complex, or any other person authorized by such builder, for providing preferential location or development of such complex but does not include services covered under sub-clauses (zzg), (zzq), (zzzh) and in relation to parking place, is a ‘taxable service’. Explanation. — For the purposes of this sub-clause, ‘‘preferential location’’ means any location having extra advantage which attracts extra payment over and above the basic sale price.
CBE&C, has clarified as follows – (Annexure- A to JS (TRU-II) D.O. letter F. No.334/1/2010-TRU dated 26-2-2010)
It has been reported that in addition to these activities, the builders of residential or commercial complexes provide other facilities and charge separately for them and these charges do not form part of the taxable value for charging tax on construction. These facilities include,- (a) prime/preferential location charges for allotting a flat/commercial space according to the choice of the buyer (i.e. Direction- sea facing, park facing, corner flat; Floor- first floor, top floor, Vastu- having the bed room in a particular direction; Number- lucky numbers); (b) internal or external development charges which are collected for developing/maintaining parks, laying of sewerage and water pipelines, providing access roads and common lighting etc; (c) fire-fighting installation charges; and (d) power back up charges etc.
Since these charges are in the nature of service provided by the builder to the buyer of the property over and above the construction service, such charges are being brought under the new service. Charges for providing parking space have been specifically excluded from the scope of this service. Development charges, to the extent they are paid to State Government or local bodies, will be would be excluded from the taxable value levy. Further, any service provided by Resident Welfare Associations or Cooperative Group Housing Societies consisting of residents/owners as their members would not be taxable under this service.
Immediate Steps to be taken by a builder/developer
Apply for registration within 30 days.
Prepare and submit running Bills till cut off date i.e. 1-7-2010, backed by Architect Certificate for the construction completed up to 1.7.2010
Make full disclosure about construction value not offered to service tax so as to avoid penalty for suppression of facts.
(Author Details – M. B. Abhyankar,e-mail:- mbabhyankar@gmail.com, Phone no.-020-24224721. Author is a Chartered Accountant in Practice from Pune, Maharashtra))
Author Bio
sir, I have booked a flat (under const) in Indore now builder is given a letter of possession and demanding service tax ,vat tax and stamp duty money is it I have to pay all. plz let me know thanks
Dear sir,
I have purchased a shop from a builder. I have give all my payment and registered. Now, builder says you have to pay service tax and I ready to pay, but builder told me that I have to pay Rs. 33000 as a service tax instead my shop value is 600000 (6 lakh). As per government rules i have to pay only 3.09% on total price of my shop. Here builder giving me number of his accountant and says talk with my accountant about service tax. I called his accountant, but accountant giving me very confusing calculation that I am unable to understand, I think he is missed guide me because he is builder’s accountant. Now, builder force me to pay service tax Rs. 33000.
l am from gujarat.i have purchaged bunglow from pratiksha homes. i have gived full payment to builder.he have gived me stamp for it but not give me possesion.he demand us servicetax&maintanance amount.please help me sir
Hi
I am from Telangana at hyderabad, I have purchased an under construction a flat from builder. but Builder has collected service tax at the time of Flat registration from me.
Could you please guide, the payment of Worker Welfare Tax is whose liability, it is builders’ or flat buyer.
Also please let me know the calculation of VAT, ST and WWF
ponnuru017@rediff.com
Regards
p akkeswara rao
Hi
I am from Kerala, I have purchased an under construction a flat from builder. Builder has sent demand letter for balance possession cost, in which he has also demanded “Workers Welfare Tax” from me.
Could you please guide, the payment of Worker Welfare Tax is whose liability, it is builders’ or flat buyer.
Also please let me know the calculation of VAT, ST and WWF
martin.antony@rediffmail.com
Regards
Martin
I,being a developer constructed 6 flats in a g+3 storied building in Kolkata of West Bengal on joint venture basis.Among 3 flats I already sold 2 flats with out taking service tax from the buyers.Now the completion certificate was already obtained from kolkata municipal corporation I want to know following questions regarding sale of flats:i)how much service tax I will now charge from two previous customers? ii) how much from the new one,who is going to purchase after C.C.iii) is there any vat will be allpicable?
Dear Sir,
I entered into an agreement in the month of July 2014 when the building with 24 flats (stilt + 3 floors)was ready to occupy and started with the wood work at the apartment upon approval from the builder. At that time the builder had agreed for Rs.75,00,000/- all inclusive and in the agreement he had mentioned VAT and Service tax to be paid if applicable. Since the building was already complete and VAT & ST is not applicable on completed projects I din’t worry much. But suddenly after a month I was surprised to see 3 more flats construction on the fourth floor( which is complete deviation from the approved plan) and now he is asking us to pay VAT & ST and is refusing to register till paid. Now the guideline vale is also increased so he is asking us to pay on the increased calculations. Please let us know is this a valid claim. its very urgent please help.
my email id is savitha.0208@gmail.com
Regards
Savitha
a investor invested in a project for Rs x on 01.04.12 and now wants to cancel the agreement the developer agrees to pay compensation for the same, is service tax applicable ? or if the developer buy back the area will this be assumed as sale for the investor? plz reply
Dear Sir,
I reside in MP Bhopal & I am planning to buy a flat @ 2400000. It’s almost ready. Am i liable to pay service tax or VAT and in what conditions both VAT & Service taxes are lavied. if builder have completion certificate, can he still charge Service tax ? Kindly clarify…..
Regards
Rajpal Singh
I am in the process of buying flat in Nallasopara and the value is 30Lac.The builder has asked me to pay service tax and vat. Please help me with the calculation.Is it compulsory for the a buyer to pay the tax.
I am in the process of buying a flat in Nallasopara and the value is 30Lac.The builder has asked me to pay t
I had purchase one underconstruction property got registration on 25.06.12 , and paid service tax & vat to builder service tax of 2.57% + 1% vat but now builder asking me to pay additional money i.e. Difference of corrent service tax which is 3.09% – 2.57% at the time of possession Pl.guide
Hi,
I have Booked a flat in feb 2014 and Sales agreement made in Aug 2014 total area 1025 Sqft.
There is agreement between builder and buyer that buyer need to pay 50% and rest through Bank loan, which i have paid but now they are demanding Service tax.
When i asked them how much then they said 9% of the paid amount which i unable to understand .I have asked them to clarify how its been calculated.
I want to know the current Service tax and Vat applicable for Under construction flat in Bangalore, is it calculated on total cost of flat or on the advance amount paid towards flat purchase.
Please help me to calculate total service tax i have to pay.
I purchased a ready to move flat directly from builder in Sept 2012 .As per agreement the cost price of flat was 19 lacs. I paid one lac as registration amount on 1st Sept 2012 and on 22 sept.2012 after receiving demand of outstanding dues of 18 lacs from builder I paid 18 lacs same month i.e on 26th Sept 2012.The registration of flat was done on same day i.e on 26th Sept 2012.Now after almost 2 years have passed the builder is demanding service tax from me .Sir I made the following reply to builder1. The service tax was come to existence on July 1, 2010 and it is applicable for Construction linked scheme and I have not opted for any construction linked plan and there would be no levy of the service tax, as the entire amount for the property purchase is paid for ready possession Flat.2. Collecting and Depositing the service tax to Government is the responsibility of builder. Since the Government notification about service Tax was already in force from July 1.2010 and buyer and seller relationship between us came to effect from 1st Sept 2012 , So he must have charge the service tax if applicable in my case before the registering the flat in my name furthermore if he have not collected Service Tax if applicable to me separately , it would imply that the amount of Rs. 1900000/- paid me is inclusive of Service Tax( if applicable). Moreover if he has charged any service tax in my case and failed to deposit in Govt. accounts then he cannot pass his inefficiency to me .3. It is quite obvious that if any type of amount was pending from my end then he would have never allowed the registration of flat.SiSir please help me whether am I liable to pay service tax or not. – See more at: https://taxguru.in/service-tax/note-on-new-service-tax-provisions-for-builders-developers.html#comment-987320
I purchased a ready to move flat directly from builder in Sept 2012 .As per agreement the cost price of flat was 19 lacs. I paid one lac as registration amount on 1st Sept 2012 and on 22 sept.2012 after receiving demand of outstanding dues of 18 lacs from builder I paid 18 lacs same month i.e on 26th Sept 2012.The registration of flat was done on same day i.e on 26th Sept 2012.Now after almost 2 years have passed the builder is demanding service tax from me .
Sir I made the following reply to builder
1. The service tax was come to existence on July 1, 2010 and it is applicable for Construction linked scheme and I have not opted for any construction linked plan and there would be no levy of the service tax, as the entire amount for the property purchase is paid for ready possession Flat.
2. Collecting and Depositing the service tax to Government is the responsibility of builder. Since the Government notification about service Tax was already in force from July 1.2010 and buyer and seller relationship between us came to effect from 1st Sept 2012 , So he must have charge the service tax if applicable in my case before the registering the flat in my name furthermore if he have not collected Service Tax if applicable to me separately , it would imply that the amount of Rs. 1900000/- paid me is inclusive of Service Tax( if applicable). Moreover if he has charged any service tax in my case and failed to deposit in Govt. accounts then he cannot pass his inefficiency to me .
3. It is quite obvious that if any type of amount was pending from my end then he would have never allowed the registration of flat.
SiSir please help me whether am I liable to pay service tax or not.
Regards,
Rakesh Sharma
Sir I purchased a ready to move flat directly from builder in Sept 2012 .As per agreement the cost price of flat was 19 lacs. I paid one lac as registration amount on 1st Sept 2012 and rest 18 lacs have been given in same month i.e on 26th Sept 2012.The registration of flat was done on 26th Sept 2012.Now after almost 2 years have passed the builder is demanding service tax from me .Am I liable to pay the same ?.Pls help……
Regards
amit
rk880@rediff.com
sir i want to clarify service tax is payable to builder if they provide services like elect,backup,elevtor and sweeper etc. flats above 50 no.
Sir after reading clarification i am fully satisfied on service tax issue on builder.
Sir i am very thankful for providing such a nice information.
sir,
I have booked flat in mysore for Rs 25,17,700/- on 12.12.2012 what is the Service tax payable by me . what documents I can ask from the builder’s f servicetax .Now he completed flats and goes to registration.
hi , i want to know that how much % of service i have to pay to builder to purchase flat. in bhopal ….rate of flat is 7,8000 rs
And i have to pay tax on maintenance amount also ?
plz reply
Sir,
Whether we can adjust cenvat credit of input services of one project for the liability of output service of another project???
We have centralized registration & taking 75% abatement, as value of land is inclusive.
sir i making agreetment to sell of rs 910000 of flat on dec2011 what is the st and vat pls
Sir, My case is as “I have bought a flat of Rs.49,55,000/- i.e. BSP (Basi sale price). The total cost of super build up area, which includes entrance lobby charges, electric sub-stationc charges, watchmen cabin and other amenities/service charges was about Rs/52,50K. It was under construction, so, i also paid service tax on BSP and thus, no dispute. Thereafter, the builder has also charged service tax on maintenance, club membership, swimming pool and interest free maintenance security, for which he received about 1,75,000/- at once. Whether service tax is payable on this amount of Rs.1,75,000/-. let me know it soon, if possible.
Builder(developer) had entered with development agreement with land owner(firm) for township project. I have booked my flat and the agreement was registered in 2009. My flat & building is ready. Since land owner’s buildings and other external amenities are not ready in the project, OC and possession is not handed over yet. Whether VAT is to be paid @ 1% on agreement value on possession or 5% after deducting the cost of land & construction cost. Builder is demanding @ 5% on agreement value. Please favour of guidance please
is service tax imposed on full amount of flat or 25%of flat cost
Sir, My builder has now has charged service tax of Rs. 1931.55 on open car parking space (Rs. 75000/-) to be provided. All the instalment for car parking have been paid by 2011. Am i liable to pay service tax open car parking space ? Please advice at alok.b14@gmail.com at the earliest. Regards.
1. PLEASE CONFIRM THE SERVICE TAX RATE APPLICABLE TO BUILDERS & DEVELOPERS W.E.F. 2006
2. ALSO CONFIRM THE VAT TAX RATE APPLICABLE IN MAHARASHTRA FOR BUILDERS
3. WHETHER THERE IS EXEMPTION FOR VAT / SERVICE TAX
4. ALSO EXPLAIN THE CALCULATION OF SERVICE TAX FOR BUILDERS WITH AN EXAMPLE
I have purchased a flat in Bhopal ,MP whose registry cost is 6.64 L ,as per builder I am liable to pay another 5% VAT to pay to government since from 1st april 2011 rules have changed and my registry is of june 2011.Kindly let me know whether i am liable to pay or builder will pay
Sir,
i want to know the rate of service tax of any builder 2012.13
is registation amount and VAT amoutnt should be included for service tax calcualtion?
Hi,
I booked and flat in 2011 and that time builder told 5% vat on basic flatcost and 2.6% service tax on (basic flat cost based on market value).
Now we need to go for registration at the end of April 2012. Builder is asking more money via vat and service tax. He is charging 5.8% VAT on (basic flat cost + Car Park + Electrical & maintanance + registration amount) and 4.06% service Tax on (basic flat cost + car park + electrical + registration amount + VAT)
So he has included regisration and VAT also for service Tax. Please advise what to do here. he is taking these taxes illegally
Is car parking and electirical deposit and mainitanance should be included for service tax
very nice. thank you sir for given this information
Dear
sir
: Do I need to collect service tax on the covered car park that I have rented along with the office premises. The rent is specified separate for the office space and seperate for the car park.
I am collecting service tax on office space. Question is what about the service tax on car park rent recd.?
anyone is aware of any case law well settled for refund of service tax to the buyer of flat when no service tax is applicable prior to July 2010 on construction of flat
Greetings
Well i am buying a Ready to occupy apartment and the builder has got the occupancy/completion certificate and he is asking to register now on full sale deed value, shall i do it, what all cost i consider to register?
And moreover, do i need to pay VAT tax to builder even on maintenance charges, corpus fund, amenities charges, infrastructure charges as he got the occupancy certificate do i need to pay Vat at all. As i need not to pay service tax, is there any way to avoid VAT totally or at least on the above mention expenditures.
Regards
Mrs Singh
respected sir ,
i have booked flat in 2010 and make full payment till may-2011 rs.-2000000 lacs and remaining ammount for price is 40000 i have paid at the time of possession as on nov-11 so what ammount i have to paid for service tax please reply me as soon as possible
Dear Sir,
we have p[urchase a flat in Navi Mumbai and the date of the Agreement ios on 09 Jun 2010 as the builder has not completed the flat and the OC is not obtained due to incompletion. teh Builder is asking to pay 3.75 % of the tax on the Aghreemnent amount. do guide me regarding the vat taxes and am i really liable to pay the VAT as the agreement of the Flat is done before the imposition of the VAT Tax.
need clarification on whether maintenance charges before obtaining OC is to be borne by Builders or is it adjustable on anuual maintenace given at the time of posession of flat. as in our case the OC was obtained in May 201 and the possession of flat was taken on October 2010.
also i guess there is a high court ruling has come in this regard in mumbai in mid 2011. please reply on this issue.and the relevant case law.
I purchased flat with agreement cost of 18 lacs.Builder insisting for vat & service tax.Is it legally applicable?If yes how much?
I request the following info:
1. When was the service tax on the purchase of new apartment introduced? What is the rate and on which amount it is charged?
2. It is not mentioned in the agreement when to pay the maintenance corpus fund to the builder, but it is stated that it has to be paid before the possession of the flat. When it is to be paid?
Sir,
Please give your comment
If the land owner sells the flats received by him against the land transferred to the developer and if he receives advance during the period of construction, whether service tax would be applicable. The developer has already paid the service tax against land transferred to him as deemed advance received.
Barun
respected members of this asssociation , i have a rough idea about the taxes here . subject is i am already a builder and i am collecting taxes from customers please send me the link or procedure duable as per possessions on april 2012 of my customers i need information how to pay taxes online or someone to guide me proper way of paying them and is to on what cost should i take taxes on agreement cost of flats or the flat value?? i need someone to communicate n help me in this matter . please contact 9890174141 i am building in rural area .
Dear All, Please let me advise. Is it mandatory to get its registration under sales tax Act and Shop Act if he is already registered under service tax Act. What is conjuction between Shop Act, Sales Act and Service Tax Act. Thnx n rgds NVN
Can anyone tell me few things in Karnataka State while buying a FLAT
1. Should a Buyer paying ST and VAT?
2.What is the % of Service Tax a builder can impose on PURCHASER.
3. What is the % of VAT that builder can ask in Karnataka State?
Note – a. My Aggreement was done in Jan 2010 and Possession was Dec 2010
b. Till date they havent given me Possession and when i ask them now they are giving me different ST and VAT rates(These VAT rates are not specified in my agreement, as well there is nothing mentioned about VAT and ST in my agreement.) – mail me to sms1978@gmail.com
Can anyone tell me few things in Karnataka State
1. Should a Buyer paying ST and VAT?
2.What is the % of Service Tax a builder can impose on PURCHASER.
3. What is the % of VAT that builder can ask in Karnataka State?
I AM A BUILDER IN NORTH DELHI I AM COMPLATED 7 FLAT IN A FINCIAL YEAR ,
CAN I ENTRED IN SERVICE TAX AND SALE TAX ACT
PLEASE SEND ME MAIL
i have entered into lease agreement for 999 years for purchased of plot and construction on the said plot land value is about 70 lacks and construction cost apporx. will be 80 lacks. whether service tax as per notification no 40/2011-ST dated 28/06/10 will be applicable to me and if yes at what percent.
thanks & regards nayana
tax consultants
i have entered into lease agreement for 999 years for purchased of plot and construction on the said plot land value is about 70 lacks and construction cost apporx. will be 80 lacks. whether service tax as per notification no 40/2011-ST dated 28/06/10 will be applicable to me and if yes at what percent.
thanks & regards
M D saraf
i have constructed stategovernment works for social welfare department lace park building work this work is applicable for the servicetax are not please send email