service tax applicability

no. builder cannot claim Service Tax.

Regards,

Advocate Rohit Dalmia

9324538481

Mumbai

There would be no levy of the service tax, if the entire amount for the property purchase is paid after the receipt of a completion certificate

The low-cost housing segment (property worth less than Rs. 20 lakh) will be totally exempt from service tax.

This tax would not be applicable to resale properties, as resale properties would essentially have obtained a completion certificate

Since, 75% of the amount charged by the builder is considered to be cost of land, materials,  you would pay 10.3% service tax only on 25% of the amount that you have paid.

Service tax will be applicable for only under-construction properties and not for completed units.

Special services provided by a builder etc. to the prospective buyers such as providing preferential location or external or internal development of complexes on extra charges [Section 65 (105) (zzzzu)] have also been brought as new service under service tax net.Service tax of 10.3% has also been levied on any payment made by you to the builder for getting a preferential location for your house / flat.

• Any amount paid for getting an apartment on a higher floor
• Any amount paid to get a flat / house with a specific number
• Any amount paid to get a flat / house facing a specific amenity, say a swimming pool, lake, park, sea, etc
• Any amount paid to get an apartment / house facing a specific direction (maybe as per vaastu)

No service tax on amount paid for parking garage.

Thankyou very much sir. The builder argues that the said clause ie. "apartment purchased after receipt of OC to be excluded from service tax " came into force only in july 2010 but the collection was made in june 2010. Though the dispute with service tax department is still ongoing, regarding liability of service tax for other apartments too in the same complex, they were all booked in 2008-09. Is the builder's contention correct?? What remeadies do I have?