Service tax on apartment

Querist : Anonymous (Querist) 28 September 2011 This query is : Resolved
sir,

kindly tell me whether service tax is payable by customer to builder on the purchase of an apartment. If yes then at what rate and on what amount is charge? Is service tax if applicable is levied on the government value of the apartment or on the market value??

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ajay sethi (Expert) 28 September 2011
budget 2010 stipulated that construction of house (in any form – apartment / flat / row house / etc) by a builder in a complex is a “service”, and introduced the service tax of 10.3% on such a service. it would be at rate which apartment was sold by the bulder service tax would be levied only on under construction property. A property is considered “under construction” till the builder receives a “completion certificate” from the relevant authorities.

Sailesh Kumar Shah (Expert) 28 September 2011
In addition to advise of Mr. Ajay Sethi, service tax is not applicable on that apartment, for which CC received by the Builder/Developer.

Querist : Anonymous (Querist) 29 September 2011
sir,

thank you for replying.please do clerify whether i need to pay tax on the market value or on the government value upon which the registration was done.

Sailesh Kumar Shah (Expert) 29 September 2011
you are required to pay service tax on the government value upon which the registration was done i.e. sale consideration as shown in agreement/sale deed.

prabhakar singh (Expert) 29 September 2011
Both of the experts are right.

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