Vat & service tax applicability
Upendra P Sinha
(Querist) 16 September 2014
This query is : Resolved
My son has purchased a Flat for Rs.25 Lacs in an under construction property at Patna in Sep 2012. The property is in the final stage of completion. The 1st sale agreement has been registered after paying stamp duty & registration fee as applicable.
Can someone help me,how much VAT and Service Tax is applicable at present and how it has been calculated.
The builder is telephonically asking Rs. 1.25 Lacs including 20,000 as interest for delay in service tax payment which he has not paid. He is not willing to give anything in writing.
Please let me know whether interest for non payment of service tax by the builder is applicable to me. Till date there is no demand in writing for this. However he has sent several reminder for final 20% payment applicable on completion of the construction.
Your advise is solicited.
sindhu Mangat
(Expert) 17 September 2014
Service tax is applicable at the rate of 12.36 percent on 40 percent of construction value if project is classified under Works Contract service or at 12.36 percent on 25 percent of gross amount if contract is classifiable under construction of complex service. Payment of service tax and interest is governed by terms of contract between you and builder.generally there is no liability on you to pay interest for delayed payment of service tax to department.howevrr if terms of agreement provides for Payment of interest you are bound by the terms.
sindhu Mangat
(Expert) 17 September 2014
Service tax is applicable at the rate of 12.36 percent on 40 percent of construction value if project is classified under Works Contract service or at 12.36 percent on 25 percent of gross amount if contract is classifiable under construction of complex service. Payment of service tax and interest is governed by terms of contract between you and builder.generally there is no liability on you to pay interest for delayed payment of service tax to department.howevrr if terms of agreement provides for Payment of interest you are bound by the terms.
Upendra P Sinha
(Querist) 17 September 2014
Thanks a lot for your valuable input which is an eye opener for all the people.
My only worry how do I pay when the builder is not willing to give anything in writing. He has informed telephonically and recently sent an email.
What is the VAT %? Is it on the total value of agreement or only the balance value after deducting the 25% Value for provision of Service Tax
Your advice solicited. Regards
