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sandeep   01 April 2016

Transfer of underconstruction flat

I have booked a flat in Mar 2013. Its now ready to move . Pending for me to take ownership.
I want to sell the property now.

Builder has provided an option to transfer the rights to buyer by paying them 1% of the property sale amount.

I have already paid the service tax .

Do the buyer(the person I am selling the property to) has to pay service tax again ??


 7 Replies

atul (ACB)     01 April 2016

If flat is part of underconstruction building, then what charges builder is trying to impose?

Normally, Builder running the affairs initially or RWA do make provisions in their byelaws to charge one side to pay upto 1% of property sale amount.

You may refuse point blank or take it in writing from him?


Pending for me to take ownership.???

Clarify this statement , First and that is most important thing. 

1) Whether you have entered Agreeement of Sale of Flat with proper stamp duty and registration fee paid , And Registered at Registrar of Sub Assurance . 

2) Which state you are located in ?

Please ans. this imp. question first then Service tax query. Because I feel some serious descripttionary in your stament and need clarification to understand in detail issue 


sandeep   04 April 2016

  • No I have not yet registered the property. We underwent a sales agreement which is yet to be registered.
  • The property is in Hyderabad .Telangana.

Note : I am paying   amount to builder at regular interval  against the demand letter raised by builder on basis of  current status of the construction.It includes the service tax as well.


Now I got the case

1) First you are not legal owner properly , Since Agreement is not registered nor stamp duty paid so transcation is not maintainable in court. But various state law help flat owner if you claim you are cheated. So inspitre of non registration your rights can be secured. But you are on high risk , this I can assure. Every paper you need to preserve properly.

2) It seems now instead of transfering flat to you by paying stamp duty and registration fee you want that flat to be sold to third party. Here be practical you are saving stamp duty , registration fee. Plus you will be confirming witness in Agreement of sale between builder and third party. Since this transcation is not legal he is expecting 1% of the market value (So he too get more from transcation and you avoid your stamp duty and registration fee)

3) Whether it is right for him to ask? ---- When transcation is bad in law then his more expectation are justified (All are after money , no one want other to earn more )

4) If you want legal ---- Pay stamp duty then pay registration fee get document registered . After that you can sell the flat to third party but some time even before society is formed Builder expect some thing from third party.

5) If you got buyer ready---- Better compromise with 1 % sign . tell builder to sign agreement to buyer you become confirming party . With this you are saving more stamp duty and registration fee. (Whatever is applicable to you as per state law) 


sandeep   04 April 2016

I have no issues in paying 1%sign.but I have issue if builder asking the buyer (the person i am transferring the flat to)  to pay service tax again.

I have bills showing that I have paid the service tax ..then how come builder can ask again the complete service tax amount again .Is it justified as per law ?? 


He is trying to extract as much as he can from this transcation which is bad in law 


May be Builder has some Service Tax issue , that if he sells flat and he does not have receipt to show he collected Service Tax then?

And Service Tax you paid he will keep in his pocket. 

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