VAT & Service Tax on new Apartment in Bangalore

Q: Hello,
I purchased new flat (under construction flat) in Bangalore in June 2011.
Basic cost of my flat is 30Lakcs. And 1.5 Lacks for Car Parking. Total basic cost is 31.5 Lacks.
My Builder charged me 5% of VAT on 31.5 Lacks (Basic Cost of Flat + Car Parking Amount).
My Builder also charged me 2.7% of Service Tax on 31.5 Lacks (Basic Cost of Flat + Car Parking Amount).
Do I need pay both VAT and Service Tax to my builder?
Do I need to pay VAT? If yes, as per Govt. norms how VAT I need to pay to my builder?
As per Govt. norms how much Service Tax I need to pay to my builder?
Please advise.

Thanks,
Venkat.

vrmaram, Apartment Resident

16th July 2011

Legal in Bangalore

vat & service tax on new apartment in bangalore

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Replies (8)

I am buying flat but bit confused after seeing your data. Here is the details what my builder charging for me:
Total sqft: 1253 and p/qft cost: 3000: 1253*3000 = 3759000
Club house: 218500
Car Parking: 300000
Service Tax 15%: 268000
Vat: 153000
BESCOM: 238000
Yearly maintenance: 43000
Legal charges: 35000

Please let me know if anything is wrong here.

pankaj,

26th February 2017

Comment

Is the VAT and Service Tax applicable for new flats?

Nakul Sachdev, Bangalore

19th January 2015

Comment

For any under-construction property that is purchased within India is responsible to pay VAT and Service Tax.

Bharat Vasandana, Bangalore

19th January 2015

Service Tax is Calculated 12.3% of the 40% Portion of the Total Cost ex: Basic Cost = 30,00,000/- and other Charges is Say = 5,00,000/- so now 40% of 35,00,000/- is 14,00,000/- know apply 12.3% Service Tax on this Amount and for Vat it is 5% on Total Value , i,e = 35,00,000/- .
The Best way to Calculate Service Tax & Vat is 9.5% of Total Cost Rather Getting Confused Yourself.

Vivek Kulkarni,

12th September 2013

Comment

VAT and service tax is only paid for under construction apartment. Service Tax is 3.09% of Total Cost(means 12.36% of 25% of total cost) and VAT is 5.5% of total cost = 8.59% of total cost.

Seshagiri Mehra, Bangalore

10th April 2013

Comment

Can any please light on Owners quota? For a Land Owner quota flat do i have to give VAT and Service Tax?? Will it be taken care by the Land Owner??

Jitendra Mishra,

14th January 2013

Comment

same question I too have. For land owner quota flat do I have to pay VAT & TAX?

Sindhu, Apartment Resident

2nd September 2013

I heard that 5% of VAT was as per BBMP, but Service Tax should be much lower than 2.7%.

vrmaram, Apartment Resident

5th September 2011

Comment

Any Answer for this?? please reply at profatt@gmail.com. I am also in same trap.

Professional Attitude,

5th September 2011

Comment

hi vrmaram,
Same with me. Builder has imposed
Service Tax (4.12%) - Rs 1,18,161
VAT (4 %) Rs. 1,10,720
BWSSB + KPTCL Charges 1,00,000 /-.
Car Parking. 1,00,000
Cost of the flat 2,66,8000

Does the construction cost includes Registration charges usually ?

Many thanks for one who throw light on this.

Subhash Subramanyam,

25th August 2011

Comment

When you buy by flat you buy two things from the builder 1. Undivided Land of Share and 2. The flat Both VAT(4% or 5%) and Service Tax(10%) on 33% of the construction cost need to be paid on no 2 and not on no 1. Make sure you get a TAX invoice for those if builder is not giving you the TAX invoice then dont give those amount.

Biswajit Acharjee , Apartment Resident

25th March 2012

sorry Service Tax is 10.3% on 25% of the construction cost

Biswajit Acharjee , Apartment Resident

25th March 2012

As on Jan 2013 ...Service Tax @ 12.36% on 25% of BASIC Price ( if Land Cost is included ) otherwise 12.36% on 33% of Basic Sale price ....rest of the things as KTPCL+BWSSB + AMMENITIES are chnarged at 12.36% ....BUT Parking could not be chnarged for service tax as , as per SC decision Parking slot is not an extra service but the part of construction itself

Rupesh Vyas,

21st January 2013

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