Service tax and VAT for apartments in Kochi

Q: How much Service Tax and VAT should I pay for my apartment in Kochi?

Ganesh Nambiar, Kochi

13th June 2014

Property Tax in Kochi

kochi service tax

vat for kochi apartments

tax for apartments in kochi

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You have to pay a service tax of 4 per cent before completion of the construction of the apartment, and a VAT of 3 per cent. Other than these two taxes, you will also have to pay stamp duty of 5, 6 or 7 per cent. There is also VAT on materials used for construction, and also excise duty, which are other taxes that you have to pay. In total you will have to pay around 25 to 30 per cent of tax in Kochi for an apartment.

Micheal George, Kochi

19th June 2014

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If you are living in a resident welfare association, you will have to pay a service tax if the monthly maintenance charge is over Rs. 5000. When buying an apartment, you should ask for a breakdown of the per cent of each tax, and also ask them if the tax rate will increase if there is an escalation in building cost.

Amal Anthony, Kochi

15th June 2014

Comment

Service Tax is a tax by the Government on the services provided by a service provider. If you are planning to buy a new apartment, two of the taxes that you will have to pay is service tax and VAT. You have to pay a single service tax to the builder for construction services, excavation, site formation, site clearance, and the construction of the building. VAT or Value Added Tax is another tax that you will have to pay the builder. The Service tax that you have to pay is 12.3 per cent of 33 per cent which is 4 per cent of the total construction. The VAT that you have to pay for an apartment is 3 per cent.

The builder has to pay a separate VAT for the materials that he purchases. Materials like bricks have 4 per cent VAT and cement has 12.5 per cent VAT.

Rajagopal Menon, Kochi

14th June 2014

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