Biju 19 September 2016

Service tax

I need to know service tax for buying a house in mumbai.property is redeveloped property. 71% is in owner name and 29% in builder name. The builder wants me to pay service tax on full amount. Is dis correct or should I be paying for only builder's percentage? Assume property is for 1 cr. Pls somebody guide me on dis?

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3 Replies

Sunil Gupta (None) 20 September 2016

Who are you paying the 1Cr to? If the entire amount is to the builder you must pay Service Tax on the entire amount to the builder. If you are making two payments of 71% to land owner and 29% to the builder, then the Service tax is payable to the two parties individually.

adv.bharat @ PUNE (Lawyer) 20 September 2016

Biju R u owner? Then u need to pay for your share only.

As per section 65 (105) of Finance Act, 1994 (hereinafter referred “Act”), any service provided or to be provided to any person, by any other person, in relation to construction of complex would be liable for service tax.

Hence, re-construction undertaken by a society by directly engaging a builder/developer up to 30thJune, 2012 will not be chargeable to Service tax as it is meant for the personal use of the society/its members. Accordingly, developer would not be liable for service tax on services provided for construction of new flats to existing members.

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Biju 20 September 2016

Mr sunil and mr Bharat, I do thank you for your response. But to clarify I am the buyer. The property belongs 29% to builder and 71 % to plot owner. Is ther a service tax for total amount or just builder share which is 29%.