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AV (ABC)     08 July 2013

Builder asking interest on service tax.

I have one query regarding payment of service tax with interest.

I have purchased underconstruction flat in sept 2011, At the time of agreement Builder was not asked about Service Tax but Now in June 2013 he is asking for Service Tax with Inerest from the date of agreement.  He saying like at the time of agreement Sept 2011 Service Tax was not applicable on under construction flat.
My question is As per my knwoladge Service tax on construction is wef 2010. So In this should i need to pay ST for 2 yr or 1 yr.  Also At the time or after 2 yrs of the agreement builder does not inform about Service tax, sudden he is asking for Interest,
Kindly suggest should i need to pay Interest on tax or not. what action i need to take, How do i need to handel this situtaton.
Pls guide me through



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 2 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     08 July 2013

Service Tax Charged by Builders for Under Construction Properties May be Refunded to the Buyers buying property in India !!! Flat buyers may be spared the 12.2% service tax, with the government making it clear that a builder who does construction work on his own do not have to pay service tax,

Ashok Jogalekar (AGM-Indirect Taxation)     07 October 2013

Service Tax  is applicable if the builder receives any amount before receipt of completion certificate. However since liability is of the Builder he can only claim Service Tax and not Interest.


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