(Querist) 06 January 2014
This query is : Resolved
I was living in tenanted building. The landlord of the said building entered an agreement with builder for redevelopment of the said building. I have received new flat in reconstructed building equal to carpet area of old room plus some extra area purchased by me. I have to pay to builder construction cost for carpet area equal to old room and at a market rate for extra area purchased by me.
Whether I have to pay to service tax and VAT to builder if he demands? [In agreement there is no clause regarding payment of service tax.] if yes, then on what amount i.e. full consideration for old area plus extra area purchased or only on consideration for new area.
(Expert) 07 January 2014
we dont reply to academic queries
(Expert) 10 January 2014
If there is no clause for service tax, then it is upon you to give the service tax to builder or not. You have to pay service tax on 40% of value determined by the builder in both type of transaction. This is because you are availing service from the builder for your flat. Now section is amended, therefore, there is no room to legal avoidance of tax.