LIVE Course on Transfer Property Law | Price Hike in 4 days | Grab it now!
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Ashish Sinha (GM)     23 April 2012

Service tax on flat purchase

I boked flat in Jan 2011. The cost is Rs. 52.00 Lacs including basic cost, amenities (club, swimming pool etc.) and car parking. I took loan from SBI for 41.60 Lac. 30.00 Lacs paid in June 2011 by bank. 11.6 Lac paid in Apr 2012 by bank. Balance amount (10.40 Lac) paid by me to builder by Jun 2011. Flat registration completed 0n 07 July 2011. Builder was supposed to handover by Dec 2011 (+ 3 Months).

Now, as per latest Service Tax rule, builder is asking Service tax on 52.00 Lac.

Need guidance on the rule as well as 'How to arrive at amount'.

Is is necessary to pay Service Tax to builder ?

Will Builder submit the amount to Govt. ?

What proof I will get as a purchaser of flat for payment of service tax ?

 



Learning

 8 Replies

Deepak Nair (lawyer)     23 April 2012

As the payment is already made and the contract is executed before the amendment in law, the said amendment is not applicable in your case. Thus, you are not required to pay any amount to the uilder towards the new service tax.

Vineet (Director)     02 May 2012

The law got amended in 2010 and service tax on developes of residential complexes is effecive since 1-7-2010.

 

Since, you booked under construction property in Jan 2011 and paid the entire sum prior to completion certificate, service tax @2.575% on entire purchase consideration is applicable and payable by you.

 

Builder has to deposit the entire sum to Government treasury. In any case it is his liability and once he gives posession to you and receipt for service tax sum, you are out of this entire issue.

Ashish Sinha (GM)     02 May 2012

Is it applicable on cost of amenities and car parking also.

Patitapaban sahu (Manager)     04 March 2014

Property details:

Two flats in one bulding belong to one builder in Bhubaneswar in Ordisha.

I had booked a flat on 30.07.2011  on payment of Rs,2 Lakh.  The flat valued Rs.35 L. Agreement to sale was signed (tripatrite agreement between IDBI bank, me and builder). I took a loan of 14.8 L from bank.  I have cleared all my dues and an amount of 3.09L is payable by bank on submission of sale deed.  I am getting it registered in Mid March 2014.  Subsequently the possession shall be given to me.

Similarly I booked another flat 02.02.2013 in the same building for 37 L.  Tripatrite agreement between bank, me and the builder took place.  I paid Rs. 26.15 L to builder and took a loan of Rs.10 L from Bank.  Now I have to pay Rs.0.85L to builder and Rs.1L is payable by bank.  I am getting it registered in Mid March 2014 along with above flat.  posessioin shall be given to me instantly.

Now, the builder has informed that service tax of Rs, 2,22 L (for both the flats) is payable to him on these flats before it is handed over to me. I would request you to advise me on the following:

1. Rate of Service Tax.

2. Point of accrual

3. when it is to be paid

4. To who it is to be paid ( to the builder / Statutory authority)

5. by cash / cheque  or draft (payable on whom)

6. what kind of acknowledgement the builder would give me

7.  if payable to builder now and if he does not pay to the statutory authority later what kind of liability I have.

Kindly advise me taking into consideration loacation of property in Bhubaneswar, Odisha.

Regards,

 

P.P.Sahu

Patitapaban sahu (Manager)     04 March 2014

Property location: Bhubaneswar (Odisha)

Descripttion of property: Two flats in same building of same builder

1st flat booked in 01.07.2011, valued 35 L, took loan of 14.8L from bank and paid my contribution.  Tripatrite agreement (bank, me and builder) - agreement to sale signed.  registration shall take place in Mid march 2014, possessiion thereafter and balance payment of 3.09L by bank on submission of sale deed. This is booked on my name and wife (2nd person)

2nd flat booked in Feb 2013, valued 37L,took loan of 10L from bank and paid my contribution.  Tripatrite agreement (bank, me and builder) - agreement to sale signed.  registration shall take place in Mid march 2014 along with above flat, possessiion thereafter and balance payment of 0.85 at the time of registration and 1L by bank on submission of sale deed.  This is booked on my wife (first person) and me.

Now the builder has informed to pay Rs.2.22 L towards Service tax to him.  kindly advise me

1. when it is payable i.e. after handing over of flats or before

2. to whom i should pay the service tax amount

3. in what manner cheque or draft (in favour of whom i.e, bulder/statutory authority)

4. what acknowledgement i should receive and from whom

5. if payable to builder now and he gives me a Money receipt, is my liability is over once for all

Kindly advise me

P.Sahu

Patitapaban sahu (Manager)     04 March 2014

Property location: Bhubaneswar (Odisha)

Descripttion of property: Two flats in same building of same builder

1st flat booked in 01.07.2011, valued 35 L, took loan of 14.8L from bank and paid my contribution.  Tripatrite agreement (bank, me and builder) - agreement to sale signed.  registration shall take place in Mid march 2014, possessiion thereafter and balance payment of 3.09L by bank on submission of sale deed. This is booked on my name and wife (2nd person)

2nd flat booked in Feb 2013, valued 37L,took loan of 10L from bank and paid my contribution.  Tripatrite agreement (bank, me and builder) - agreement to sale signed.  registration shall take place in Mid march 2014 along with above flat, possessiion thereafter and balance payment of 0.85 at the time of registration and 1L by bank on submission of sale deed.  This is booked on my wife (first person) and me.

Now the builder has informed to pay Rs.2.22 L towards Service tax to him.  kindly advise me

1. when it is payable i.e. after handing over of flats or before

2. to whom i should pay the service tax amount

3. in what manner cheque or draft (in favour of whom i.e, bulder/statutory authority)

4. what acknowledgement i should receive and from whom

5. if payable to builder now and he gives me a Money receipt, is my liability is over once for all

Kindly advise me

P.Sahu

Patitapaban sahu (Manager)     04 March 2014

Property location: Bhubaneswar (Odisha)

Descripttion of property: Two flats in same building of same builder

1st flat booked in 01.07.2011, valued 35 L, took loan of 14.8L from bank and paid my contribution.  Tripatrite agreement (bank, me and builder) - agreement to sale signed.  registration shall take place in Mid march 2014, possessiion thereafter and balance payment of 3.09L by bank on submission of sale deed. This is booked on my name and wife (2nd person)

2nd flat booked in Feb 2013, valued 37L,took loan of 10L from bank and paid my contribution.  Tripatrite agreement (bank, me and builder) - agreement to sale signed.  registration shall take place in Mid march 2014 along with above flat, possessiion thereafter and balance payment of 0.85 at the time of registration and 1L by bank on submission of sale deed.  This is booked on my wife (first person) and me.

Now the builder has informed to pay Rs.2.22 L towards Service tax to him.  kindly advise me

1. when it is payable i.e. after handing over of flats or before

2. to whom i should pay the service tax amount

3. in what manner cheque or draft (in favour of whom i.e, bulder/statutory authority)

4. what acknowledgement i should receive and from whom

5. if payable to builder now and he gives me a Money receipt, is my liability is over once for all

Kindly advise me

P.Sahu

keshav (SME)     10 October 2014

hello Sir,

I had booked a flat in June'10 in Pune and made the payments in installments partly through bank loan and rest from self by staring from June 10 to Aug 10. I had registered the flat in Aug'10 and have been provided the possession of the property by the builder and have been paying my utility bills ever since. While till date, builder haven't given the completion certificate.
The builder has now contacted me saying that I need to pay an additional 3.09% of the total amount paid post 1st July 10 as service tax. I need an advice about my liability in this case. Am I really liable to pay this amount or is the builder trying to pass off his liability on to me. if there is something which can help to diminishes the impact.

Thanks and regards,
Keshav.


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  


Start a New Discussion Unreplied Threads



Popular Discussion


view more »




Post a Suggestion for LCI Team
Post a Legal Query