Service Tax on under construction property
___Raja___
(Querist) 11 May 2011
This query is : Resolved
Can come property lawyer give some information on the Government of India ruling on the issue of service tax for under construction property. As per the builder, we are supposed to pay 2.575% tax on all payments made after 1st July, 2010. I want to know the following,
1. Where can I find the Government of India circular (online if possible) which states that property buyers are supposed to pay this tax. As far as I know, the matter was still pending in court and a final ruling has not been given.
2. Legally who is supposed to pay this tax? The builder or the property buyer? Is the builder passing on his burden on the property buyer? Can this be challenged?
Thanks,
Raja
Raj Kumar Makkad
(Expert) 11 May 2011
This notification has been circulated by GOI effective from 1st July 2010 that every payment made to builder thereafter shall be subject to levy of tax @ 2.575% so this is mandatory and builder is not shifting it towards you rather it is your liability as the pending case has already been decided.
