Clarification on Section 65(105)(zzzzu)
sushil bhatt
(Querist) 02 December 2010
This query is : Resolved
Dear all,
I have booked a flat which is under construction from a builder in August 2010 for a total cost of Rs.25,00,000/- no other cost is there. The payment is as per the Construction Link Plan. I have paid the booking amount /1st Installment to the tune of Rs.3,00,000/- at the time of booking. After that the 2nd installment @ 10% of total cost was due on or before 30.11.2010, which the builder has demanded from me recently but the builder is demanding as service tax @ 2.575% on paymnet of 10% of total cost (i.e. 2,50,000 + 6,437.50 = 2,56,437.50).
Is the builder is entitled for service tax as I know that the said service tax under above section is chargeable only on some special service provided by builder such as 'PLC, EDC &IDC etc on extra cost'.
The property is situated in Gurgaon, hence is there any stay of High Court in collectin such service tax.
Pls clarify.
B.Chakrapani Warrier
(Expert) 03 December 2010
The services will come under section 65(105)(zzzh) ie., "construction of complex", of the Finance Act,1994. Tax Rate is 2.575% as per Circular DOF No.334/03/2010 TRU dated July 1,2010 subject to Notification 29/2010. Builders contention , as per my understanding of the issue, is correct.
