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Chirayu (SW Developer)     22 June 2012

Vat and service tax for flat in pune

I have recently purchased a flat in pune. The building is having 2 parts, wing A and wing B. Wing A is having 4 flats and wing B is having 8 flats. My flat is in B wing. My builder is asking for Service Tax and VAT for the same property.


My question is - do I liable to pay mentioned taxes. If yes then at what percentage. Please give me proper calculation.



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 3 Replies

Rohan Sumungal (na)     26 June 2012

Neither is payable if you are buying a finished flat. However, where you have been making deferred payments under agreement whereby construction is carried out progressively under an agreement to which you are party then the situation is more complex and VAT will be payable as the agreement may be treated as a "works contract". As far as service tax is concrned, I think the matter has been well settled by the Supreme Court that VAT and service tax are mutually exclusive and cannot be applied to the same incidence. Would like to see what others have to say about this.

CA. Vikash Dwivedi (Chartered Accountant)     19 July 2012

in the year 2010 govt of maharastra imposed 1 % VAT on purchase of flat effeective from 1.4.2010 but it was challanged in the court the matter was in court. sometimes back Mumbai HC gave its verdict in the favour of govt but still it is not well settled that VAT and ST has to collected however some crook builders have been collecting VAT and ST even before govt regulation. 

VAT + ST = 4.09% of the registered value. 

those builders collected these levy deceitfully making their future dicey.

Advait (SW Developer)     03 September 2012

I have purchase flat in Pune in 2010.  Registration Date is Mar -10.  I have made builders payment after in Aug. 2010.  I have give cheque for service tax to builder date is not mentioned on cheque & he didn't give me receipt for that.  He told that "case regarding service tax is in process in court we'll submitte cheque after its result & then you'll get receipt".  Now he is asking updated cheque with interest on service tax (18% p.a.).

Shall I pay interest on service tax? 


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