Advice on vat and service tax on property in maharashtra
prasad
(Querist) 01 November 2012
This query is : Resolved
I have query regarding applicable VAT and Service tax on property.
I have purchased flat in Pune, Maharashtra. Agreement was executed in
July 2010 and I got the possession in 2011.
Can you please tell me the applicable service tax and VAT rates for me?
Builder is telling I have to pay VAT by 5% and Service tax by new
increased rate(I think it is 3.6%).
I think appliacable VAT is 1% and Service Tax is 2.57%
Please advise
ajay sethi
(Expert) 02 November 2012
VAT
the new composition scheme is effective for the flat/units registered on or after 1st April, 2010@ 1% on the agreement value of the transfer of flat/unit under construction
SERVICE TAX
By the Finance Act, 2010 the Government has amended the definition of Commercial or Industrial Construction Service [Section 65 (25b) read with Section 65 (105) (zzq)] and construction of Residential Complex [Section 65 (30a) read with Section 65 (zzzh)].
The scope of these categories is expanded to cover sale of flats/units under construction. 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/unit
There is an abetement of 75% of the sale value. Thus, the tax will be levied on 25% of the sale value of flat at the rate of 10.3%
