Advanced service tax on entire cost on a property in const.

your understanding is 100% right.,

I dont know why builder is doing this way.. I think this developers is not a  branded company.. he must be a local builder,

'when you make this consttruction link payment,  ST arise only when you make payment to builder... not otherwise.

Thanks for the response Rahul. The build is a very well know builder, so I am amused by the demand to pay all ST upfront.

Dear Sir,

First you insist for Service Tax Registration No. which provided by Central Excise Officials.

Service tax is collected only after completion of service, this means progressive payment in case of under construction property. This is what Law says and accounting standard says.

this is a malpractice adopted by builders to ask ST upfront because they get Funds free of cost and they will pay ST to the credit of Govt on as and when they complete each slab/ level which is an offence.

Under Any law if tax is deducted / collected on behalf of govt the deductor or collectore can not keep/ use the amount he has to deposit whatever he has deducted/ collected.

In case he forces you to pay upfront you can remind him section 73A (2) of finance act  1994 or you can ask him to show you that entire amount paid by you is deposited to the credit of govt.  and u/s 73B you can ask him to pay interest on the amount he collected in access /advance.

if you dont mind, who is the builder and the location in pune?

Thanks for the responses. I went and spoke to sales staff at builders office. The builder is Paranjape Consturctions. The response i got is that the complete Service tax will be paid to the goverment in advance. As law, they cannot keep the ST money with them. They are saying that this is done to reduce the burden on the builder.

As told by them - With every stage completion, builder is supposed to pay money to goverment for all the flats sold.But the payments from all the clients are not received on time that causes additional burden on builder - moneywise and managing the accounts. To simplify it, they want to pay all the ST in advance to the goverment. They can show me even the challan of the payment, but also said i will not be able to figure out anything from it since the payment is for multiple flats.

Thanks for the responses. I went and spoke to sales staff at builders office. The builder is Paranjape Consturctions. The response i got is that the complete Service tax will be paid to the goverment in advance. As law, they cannot keep the ST money with them. They are saying that this is done to reduce the burden on the builder.

As told by them - With every stage completion, builder is supposed to pay money to goverment for all the flats sold.But the payments from all the clients are not received on time that causes additional burden on builder - moneywise and managing the accounts. To simplify it, they want to pay all the ST in advance to the goverment. They can show me even the challan of the payment, but also said i will not be able to figure out anything from it since the payment is for multiple flats.