Service Tax on Propoerty

Ravi Majmudar (Querist) 27 May 2011 This query is : Resolved
Dear Sir,

I booked an apartment in Vadodara few days back. The property is still under construction and the possession will be given in next few months. Builder has informed that Service tax is payable @2.75% of property value. Please advise on the applicabiity and rate of service tax.

Regards.

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R.Ramachandran (Expert) 27 May 2011
The building where you have booked your apartment has more than 12 residential units, then Service Tax will get attracted. And you have to pay the service tax. Otherwise not.

Ravi Majmudar (Querist) 27 May 2011
Thank you Sir for the reply. The campus is having 5 towers having 16 apartments each. What is your advise on the rate of service tax of 2.75% of property value what builder is asking?

R.Ramachandran (Expert) 27 May 2011
Yes. The rate charged by the builder is in order.

Guest (Expert) 01 June 2011
Even if Service Tax is charged that will have to be deposited to Government. So, the builder would not have wrongly informed you.

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