Service tax and vat
suman giradkar
(Querist) 14 May 2014
This query is : Resolved
Hello Sir/Mam,
I have booked a flat in Besa at Nagpur. Now property is under construction. I have paid registry/stamp duty charges{done Agreement to sale} for flat on Nov 2013.
Now my builder is asking me to pay service tax and VAT. Builder is asking me to pay this amount immediately." So Now,I want to know "what's the Right time to pay service tax and VAT? What is the perfect percentage for Service tax & VAT for my city/area?"
Can I pay this service tax and vat at the time of possession?
Please Guide Me...
Thanks in advance.
R.V.RAO
(Expert) 15 May 2014
present rate of vat in maharashtra 1%, on Res.flats(under construction flats).
serv.tax @12.36% of 25% value of the under construction flat.
(the 75%reduction in flat value for serv.tax purpose is called abatement ).
For availing 75% abatement facility, two conditions should be fulfilled.
1.)the area of the res.flat should be lesser than 2000 sq.ft and value less than one crore rupees.
2.)land value must have been included in flat cost.
if you have purchased the flat after the builder obtained a completion certificate from the statutory/ competent authority , no need to pay for serv.tax,as flat is not under construction.
as to timing of payment of these taxes, note that unless you pay both serv.tax and vat, before the flat registration, the same will not be done in your name.
suman giradkar
(Querist) 15 May 2014
Thanks Sir, For your valuable reply....
Sir, I am little confuse with your last sentence.. I did not understand when to pay taxes. Sir, your term 'flat registration' means flat possession or registry?
Sir,right now that building is under construction[building plan is just for 4 floors; total 8 flats only]..
I did registry[agreement to sale as I want to process for loan in bank] when building was just on papers; it means construction was not started at that time.... And now slabs done and bricks work is going to start.
Please help me out; I will be really thankful to you..
R.V.RAO
(Expert) 16 May 2014
you must pay serv.tax and vat before registration of the sale deed containing SRO stamp (do not confuse with agreement for sale) when the flat is finally registered in your name.
if all flat owners decide to pay ,follow their timing, in any case we need to pay statutory dues before the flat sale deed regn.in owner's name.
suman giradkar
(Querist) 16 May 2014
Thanks Sir for resolving my doubts.
R.V.RAO
(Expert) 17 May 2014
you are welcome.
suman giradkar
(Querist) 08 February 2015
Hello Sir,
I have made registry (stamp duty) on Nov. 2013 so my question is after registry when we have to pay service tax? is there any fix period of service tax payment? (property still under construction.) If we delay to pay it then how much penalty will be charged...?
I would be thankful to you if the rule position in this regard is explained to me.
Regards.
