Dear Experts,
Recently I have read in the newspaper that In a judgment,Delhi High Court has held that service tax cannot be charged on property units in a complex, which include builder flats, group housing flats and builder floors.
Service tax cannot be charged on transfer of property, as it is covered under other laws, including stamp duty charges.
The court also accepted that it was not possible to differentiate between the cost of land, cost of construction, labour and other costs, from service costs, as the contract between a buyer and the builder was a “composite contract” that included all costs and payments.
Clearly service tax cannot be levied on the value of undivided share of land acquired by a buyer of a dwelling unit or on the value of goods which are incorporated in the project by a developer.
The judgment also says that buyers who have purchased property after 2012 should be refunded the service tax.
Kindly confirm on the following judgements can be applied in other places of India citing Delhi High Court's order as a precedent?
Most experts say the tax department is likely to appeal against the order. But until the order is stayed, can flat buyers take the stance that they will not pay service tax?
Regards,
Ani....
