Q: Dear Sir, I booked a flat in Badlapur and duly registered in Nov-2011, almost all installments paid were (90%) except the final one. In my sale agreement which was registered, date of allotment is given as Feb-2012. But now Builder has given me possession of flat in May-2012 now he is asking for Service tax @12.36%. Is this correct because my sale Agreement was made in Previous financial year so it should be @10.30% please guide me to come out of this problem. If any circular is there regarding this, please tell me. Thank you.
Service Tax has to be paid on all under construction properties. As per my knowledge previous year service tax was 10.30% and in the budget 2012 the service tax has been hiked by 2% . The hike rate would be applicable from the April 1st 2012. In your case, the increased service tax would be applicable only on outstanding amount ie., 10% amount and not on entire 90 % which you already paid.