Service tax amenmment
Anil Jain
(Querist) 21 December 2011
This query is : Resolved
I have booked a flat before july 2010 and now builder started to charge service tax @2.53% at remaining amount.Please suggest me should I pay service tax.
ajay sethi
(Expert) 21 December 2011
Builders/developers are now liable to service tax if any payment towards sale consideration is received before the grant of completion certificate by the competent authorities for such flats/units
if a builder/developer receives the entire sale consideration for flats/units after issue of completion certificate, the same is not liable to service tax.
you may have booked flat before july 2010 but building is still under construction you have to pay service tax .
specific exemption from service tax has been provided for advances received prior to 1.7.2010 vide Notification No. 36/2010 dt. 28.6.2010. As per Notification service tax is not payable on the amount of advance payment received before the 1.7.2010, for taxable services to be provided, on or after 1.7.2010.
Thus exception has been made for the advances received from the customers before 1.7.2010, even though construction service related to such advances is to be provided after the service has become taxable.
It should be noted however that this exemption is limited to amounts received as advance before 1.7.2010. For all subsequent advances liability will arise towards service tax as per normal provisions.
Sailesh Kumar Shah
(Expert) 21 December 2011
If building is under construction or Completion certificate is not taken by the builder, you have to pay service tax.
Raj Kumar Makkad
(Expert) 22 December 2011
The charging of service tax by builder in the given facts is accurate and legal.
prabhakar singh
(Expert) 22 December 2011
Yes!In this case building is chargeable to service tax.
