keshav (SME) 10 October 2014

Service tax on ready possession flat purchased on 2010

Hello Sir,

I had booked a ready possession flat in June'10 in Pune and made the payments in partly through bank loan and rest from self by staring from June 10 to Aug 10. I had registered the flat in July'10 and have been provided the possession of the property by the builder and have been paying my utility bills ever since. While till date, builder haven't given the completion certificate.
The builder is now contacted me saying that I need to pay an additional 3.09% of the total amount paid post 1st July 10 as service tax. I need an advice about my liability in this case. Am I really liable to pay this amount or is the builder trying to pass off his liability on to me. if there is something which can help to diminishes the impact.

Thanks and regards,
Keshav.

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3 Replies

Hardeep (Business) 10 October 2014

I am not sure if a builder is liable to charge service tax, since when and at what rate but Service Tax is a tax on the user of services, collected by the service provider from the user and then deposited to the Government.

so, if the Builder had put terms that all taxes if any are payable by you or had so advised you the moment he came within the Sevice tax net, you are so liable.

Hardeep (Business) 11 October 2014

Found this his on another thread at LCI here - could be of interest/ use to you...

"With respect to your builder's delay in charging Service Tax in his initial bill, I would like to point out that in the case of Max New York Life Insurance Co Ltd Vs Insurance Ombudsman and Others reported in [2013] 57 VST 514 (Ker), the Hon’ble HC has held that a service provider who does not disclose the prevailing statutory duties and levies at the time of transaction is not entitled to claim such taxes and levies from the consumer at a later stage during the course of continuing service.

Hence, you may deny to pay the Service Tax on the ground that he has not charged the service tax on the initial bill."

Prasenjit Bangal (e/o) 13 October 2014

Hallo sir,

I have booked a flat on 7/08/2014. After that i did a sell agreement 25/08/2014. Then i took home loan from lic and completed registration on 18/09/2014. And the builder gave me the keys for resedency. And right now i am living in this flat as it was 100% ready. Also i have separate electric connection. But right now builder asking me for service tax 3.09%. I asked for completetion certificate but builder told me that they applied for not getting yet. He is not giving possesion letter. Please advice me that i am liable to pay service tax..

Thanking you