Soumya 19 June 2017

Apartment service tax after registration

I bought an apartment of Rs 50, 06,800 ( including Rs 5 lacs for parking space) in Howrah city of West Bengal. Final registration has been completed on September 2016. Completion Certificate has not been given till now. The builder is now asking for service tax of 4.5%. What is this service tax? How much is the actual service tax? How do I know if the builder has already paid the service tax or is trying to cheat me? If I get late for payment what will be the penalty? If at all I have to pay this service tax, then can I pay the tax directly to the Tax Office in my city? Please clarify my doubt. I feel like being cheated.

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Arjun Kohli 22 June 2017

Yes, the builder is entiitled to ask for Service Tax from you. However, the percentage you quote does not seem correct. The actual percentage of Service Tax is 3.75%, as far as I can find. It doesn't matter if the builder has already paid or not, because there is a right of the builder to recover that Service tax from you. The only thing you can confirm as per your contract of sale is whether the Service Tax was included in your total purchase price or not. And since it is an Indirect tax, you can not pay it to the Tax authorities.

However, feel free to take any local legal assistance to further satisfy yourself, if required.

Regards