Criminal Trident Pack: IPC, CrPC and IEA by Sr. Adv. G.S Shukla and Adv. Raghav Arora
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Rishabh (engineer)     31 January 2012

When to pay s.tax and vat for underconstruction property

 

Hello, my name is Rishabh and I have booked a property in Pune. It is an Under Construction Property with possession date confirmed as Dec, 2013. Right now, the construction has just started and plinth work is going on. The builder is asking for payment of Service Tax and VAT at the time of agreement which I will be doing this month. 

My question is when builder has to pay the VAT or Service Tax to the government? Is it after the construction is finished or its applicable on per booking basis. Also, should I ask for a government receipt over the actual payment of Service Tax and VAT.

I am confused about paying him now as nothing is ready in the building as of now.

Thanks in advance..



Learning

 13 Replies

adv. rajeev ( rajoo ) (practicing advocate)     31 January 2012

No VAT and service tax for such transactions

Rishabh (engineer)     31 January 2012

So, it will be payable after the possession?

ramesh (profession)     31 January 2012

service tax is payable by builder on collection / advances received from customers .  & VAT is payable at the time of registry of the said property.

S Ramakrishnan (Proprietor)     31 January 2012

You have not defined the property of construction very clearly.  If it is individual building, there is no serive tax.  If it is a flat more than 16 houses then service tax is applicable.  you clearly indicate the type of construction so that we can clarify clearly.

Rishabh (engineer)     31 January 2012

It is a multistorey apartment building with 32 flats in each building.

Is it OK to pay him beforehand all the Service Tax?

Otherwise when it should be paid. The builder has to pay for each advance transaction or he has to pay it one time for the complete cycle?

I am taking a loan on the property with 80% value being taken from Bank.

S Ramakrishnan (Proprietor)     31 January 2012

Service Tax is mandatory.  Service Tax is to be paid on advance / bill / payment received whichever is earlier.  whenever you make part payment, they have to pay service tax for the payments received by the builder.  VAT is to be paid on completion of the building and not in between or against advance.  it is based on the completion and rasing the bill on you.  hope i have clarified your querry.

Sandeep (S/w Engineer)     23 July 2012

Please can you tell me percentage of service tax and Vat.

Is service tax is diffrent for assessment year 2010-11 and 2011-12.

Please tell me percentage, thanks in advance.

CA. Vikash Dwivedi (Chartered Accountant)     24 July 2012

In the maharastra the VAT is payable on all the aggrement registed after 1.4.2010 @ 1% whereas Service Tax is payable on all the property including residential property registered after 1.7.2010 @ 2.57% of the registered value.

As far as time of payment is  concerned it is to be paid by the builder once the sale is complete and the completion certificatge is issued by the authority however builders collect it at the time of registration of agreement. This provides them additional funds to use till the property is complete.

The levy of VAT was challanged in the Honbl high court and HC has given verdict in favour of Govt.

In my view VAT should not be levied on the residential properties since this does not come within the defiinition of Goods as defined unde sale of goods act.

Gokul (Engineer)     24 December 2012

Hello,

I am Gokul Ganjare  and I have booked a property in Pune in 31st Oct 2009 and done aggriment on 01st.Jan.2010 . It is an Under Construction Property with possession date confirmed as March, 2013. Right now,85 % work is over. The builder is asking for payment of Service Tax and VAT

I am confused about paying so i have pay or not Applicable for me because as following

In the maharastra the VAT is payable on all the aggrement registed after 1.4.2010 @ 1% whereas Service Tax is payable on all the property including residential property registered after 1.7.2010 @ 2.57% of the registered value.

I have done aggriment on 01st.Jan.2010  before 01.04.2010

Please sugget me and how much Services Tax and Vat I have Pay.

 

Thanks

Gokul

laxman uttam bhong (patner)     07 July 2013

Hello, my name is Laxman and I have booked a flat in multistonry apartment in Pune on jan 2012. It is an Under Construction Property with possession date in March 2014. Right now, the tilling work is going on. The builder is asking for payment of Service Tax and VAT .I have done 90 % payment. My complete Vat & 80 % service tax collected.But without any tax invoices how builders collecting vat/service taxes?May pay service tax/vat without bill?Is they will pay gornment?How will I get ThisTax benifit in income tax Return?

Please advice me for the same.

 

Regards

Laxman

Santosh   21 March 2016

Dear All,

I m a buyer in a underconstruction property. I wanted to know whether VAT is payable to builder only after the possession or at the time of agreement.

 

 

pankaj   09 October 2017

I have purchased a flat which was under construction in 2010 in H wing having 40 flats. G wing has 40 flats. E&F wings have 112 flats. C&D building are under construction ,A&B wing yet not started. Builder comitted to complete the whole site with all amenities in 2014  but still not completed any amenities so far. I have paid Service Tax and Vat to builder in 2013. I got possession in 2013,but no completion certificate. Builder has given 40 flats  electricity bills from a single meter,there is no installed single meter for each flat so flat so we are paying electricity bills every month 10Rs/unit which is more expensive. Now builder is forcing us to pay the pending amount of amenities otherwise he will not install individual meter. Also he has not paid the service tax to government. What to do in this situation?

Registerexperts (company registeration)     10 November 2017

You have not defined the property of construction very clearly.  If it is individual building, there is no serive tax.  If it is a flat more than 16 houses then service tax is applicable.  you clearly indicate the type of construction so that we can clarify clearly. 

 


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