Ramesh (SA) 16 June 2013

Service tax and vat

I have made an advance for my Flat in Coimbatore, Tamilnadu on Feb-2010 and it is nearing completion. Last month the builder is asking for additional amount of Rs. 190000 for service tax, VAT and additional statutory charges. Here are the details

Construction Agreement Value (MOA) Rs. 22,99,500.00

Service Tax at 4.12%   Rs. 94,739.40

VAT [ TN Works Contract Tax @ 2% ] Rs. 45,990.00

Additional Statutory charges (Corporation) Rs 50,000.00

Please note the above information was not mentioned in the Sale Deed. Could you please let me know whether I need to pay the additional amount?

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2 Replies

VISHNU PROMOD SRIVASTAVA (ADVOCATE) 20 June 2013

In my opinion you will have to pay addl. amount of S.T. & VAT.

Vineet (Director) 24 June 2013

Service Tax: on purchase of under construction residential flat, service tax is payable for payments made after 1st July, 2010. For payments made between 1-7-2010 to 31-3-2012 the rate of service tax will be 2.575% and after 1-4-2012 it is 3.09%. No service tax is payable on payments made before 1-7-2010.

For payment of VAT please check with local consultant. In Maharashtra VAT is payable @1% of transaction value.