Service tax on buying an apartment in a project.
Ravinder Kumar Rohilla
(Querist) 16 February 2013
This query is : Resolved
Dear Sir,
We booked a flat in a project in January, 2010 in a pre-launch offer by a builder by paying 10% of cost in Noida. He also demanded 25% in 45 days of the booking but was paid only after signing of Allotment letter. The bhoomi pujan was performed in May,2010 and allotment letter was finalised in Oct. 2010. The builder also demanded service Tax @ 2.575%. Kindly give your valuable opinion on levy of Service Tax. Will it be levied on total cost of the flat including club house, car parking etc.? Also will it be charged on the amount paid before the construction of the flat started. In short, kindly update me on service tax to be charged by the builder. I shall feel obliged.
Raj Kumar Makkad
(Expert) 16 February 2013
Car parking slot cannot be sold by builder so its cost cannot be included in total cost and club membership is also not included in the cost of house hence apart from these heads, the service tax is payable upon cost of house whether the same is paid prior to construction or thereafter.
H.M.Patnaik
(Expert) 18 February 2013
Agreed with experts but check up the rate of service tax applicable to such transactions in Oct.2010 since the rate of S.tax indicated by you i.e.2.575% is incorrect. I presume ,the builder may be asking for service charge instead. Pl. check up demand letter.
