Service tax on under construction property

Pallavi (Querist) 03 March 2015 This query is : Resolved
Hello,

I had booked 2 BHK flat in Pune in January 2015.I had paid Rs 5lakh towords advance of the same. However I have not yet entered into any legal agreement with builder.

I am cancelling my booking since builder is not submitting approved blue print.

Builder informs me that he has paid service tax on my advance payment i.e. Rs 5 lakh. he will deduct that amount and will give me cheque for the same. He will give me the receipt of service tax paid against my booking.

My questions are;
1. when do builder pay service tax?
2. Can he deduct the same from my advance payment?
2. Is deducted service tax would be loss for me against cancellation of booking?
3. Since builder is failing to submit necessary documents I am cancelling the booking, do I have to bear the service tax amount paid?

kindly help

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Anirudh (Expert) 03 March 2015
He has to pay the service tax when he received the money from you.

Yes.

Yes.

If he has not made available necessary document, why did you pay the money in the first place?

Pallavi (Querist) 03 March 2015
He has given commencement certificate and told blue print he has submitted to PMC for revision and will give me within 8-10 days.
he had submitted other documents like NA, title clear history which were ok

Pallavi (Querist) 03 March 2015
I have given 5 lakh so builder suppose to deduct 3.09% of 5 lakhs or how much?

Will this deducted service tax will be cost to me?

Pallavi (Querist) 03 March 2015
Thanks Anirudh,

One more query, will builder not collect service tax from another customer to whom he will sell the same flat?

Anirudh (Expert) 03 March 2015
He may. But the entire service tax so collected will be deposited by him with the Govt. He will not and cannot retain any portion.

Pallavi (Querist) 03 March 2015
Ok.
Do builder pay Service tax on the name of person to whom flat has been allotted or is it being paid on the name of his company?