PuneBuyer 01 December 2015

Service tax and vat payment

Dear Members need help on Service Tax and VAT payment

Recently I have booked Flat in the Pune and done the agreement in last week
while booking builder told me to pay the Service Tax & VAT and gave the cost, but builder was agree to pay the Service Tax at the time of possession.
below are the cost details -
Agreement cost(Basic+Parking+Development charges etc. ) - 40,80,000/-
Service Tax(3.5%) - 1,42,800/-
VAT(1%) - 40,800/-
Stamp duty(6%) - 2,44,800/-
Registration - 30,000/-
-------------------------
TOTAL -45,38,400/-

below is the sequence so far...
15-Septemeber - booked flat - Paid booking Amount - Rs. 50,000/-
15-Novemeber - Before Agreement I paid Rs. 11,31,600/- (including booking amount)
Paid Total = 20% of agreement cost + Stamp Duty + Registration + VAT = 11,31,600/-

on 20-November we did the agreement(Registration), while agreement I come to know that builder got the completion certificate from Pune Municipal corporation for the flat of Date 13-November-2015.
Builder is giving possession in Jan -2016. After agreement in Demand letter he mentioned the Service Tax with remaining 80% of Agreement cost.

As I made Payments after getting the Completion Certificate, my question is should I Pay the Service Tax to builder or Not?

Please help.

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2 Replies

Advocate Rohit (Advocate) 03 December 2015

Hello!

As far as the law is concerned it is the builder who are liable to paqy the Service tax and VAt to the Government and not the buyers. Further, has the builder paid Service Tax and VAt to the Govermnet, you may ask the builder to furnish the receipt of the same along with his Service Tax and VAT Registration Number and ask him to raise a demand letter for the same mentioning his Service Tax and VAT Registration Number upon it.

if you have made the payments after getting Completion Certificate for the building, then No Service Tax and VAT can be charged upoin it.

Regards

Adv. Rohit M. Dalmia

9324538481

Mumbai