Regarding service tax on residential Property.

Q: We have bought a house in April 2012 from the builder worth Rs 50 Lakhs. The occupational certificate is issued dated June 2009 i.e prior to date of registration. Now the builder is asking us to pay Rs 1.5 Lakhs or 3 percent towards service Tax and Rs 0.5 Lakh or 1 percent towards VAT.

Q.1.Are we suppose to pay service tax of 3 percent even though we have bought the property post occupational certificate?

Q.2.Are we suppose to pay VAT of 1 percent even though we have bought the property post occupational certificate? What all proof do we need to take from him, if we have to pay him?

Would be a great help if I get some clarifications.

If I can get some relevant government notification link on service tax regarding purchase of constructed property, Concrete proof on regulation etc .