Service Tax and VAT on New Purchase Flat

Q: I have purchased new flat in Oct 2012 in Panvel,Navi Mumbai.I have paid 20% (4Lakh)amount and made 80 (12 lakh) % loan.i confuse about who's will pay service tax and VAT and how much?

Nitin Sutar, Navi Mumbai

28th July 2014

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Replies (13)

Hi,
Sir, I need to know regarding Stamp Duty and other charges. like I buy already a Flat now a time to take position so before that i need to make registration so what type of taxes should be paid by me? example stamp duty and what? Appreciate your immediate response.

Salim Surve,

25th December 2017

Comment

i buy flat in ncr Delhi on 2016& sell in 2026 ,what is tax

Prabhat Kiran,

12th May 2016

Comment

Hi Prabhat,
It will depend on the circle rate of that area in 2026.

Shantanu Kumar, Mumbai

1st June 2016

hi,
wanted to ask when do builders charge for car parking charges and society maintenance charges in case of an under contsruction building??? should we pay it in white or black??

disha, Mumbai

10th April 2016

Comment

Hi Disha,
If no Completion Certificate is obtained by builder you can't occupy your flat. You don't have possession so, no maintenance and car parking charges as building is under construction. You can send him a legal notice and approach consumer court if required after that.

Vineet Tendulkar, Mumbai

1st June 2016

hi,
wanted to ask when do builders charge for car parking charges and society maintenance charges in case of an under contsruction building??? should we pay it in white or black??

disha, Mumbai

10th April 2016

Comment

In absence of completion Certificate and Occupancy Certificate, you can not take the possession of your flat. So, if you don't have possession of your property, you don't need to pay any society maintenance and car parking charges. As car parking charges has to pay once the society formed.

Vineet Tendulkar, Mumbai

1st June 2016

hi,
wanted to ask when do builders charge for car parking charges and society maintenance charges in case of an under contsruction building??? should we pay it in white or black??

disha, Mumbai

10th April 2016

Comment

Hi,

I have purchased a Registry Case flat in Faridabad with cost of 41.25 Lakks and my registry is done . Now the SRS is asking me for VAT . Can i know why i have to pay this? and how much i need top pay for it??

Rahul,

15th September 2015

Comment

Hi,
VAT and service tax is only paid for under construction apartment. VAT and Service Tax are not applicable on ready-to-move-in properties. For instance, if you have bought a property when it is almost ready-for possession, you must consider to postpone your sale agreement to be signed after completion certificate is issued. If you do so, then you will be saved from paying these charges.

Service tax and VAT varies from state to state. Currently VAT in Faridabad is 5%.

Hemant, Noida

23rd September 2015

According to me you have to consult with legal adviser. These charges are paid at the time of property registration. If you have got the occupancy certificate and living in the flat then i don't think you have to pay these charges.

Neha Srivastava, Delhi-NCR

24th September 2015

i was buy flat & stamp duty pay ay 2014 but i didnot pay service tex at that time

chirag shah, Mumbai

15th July 2015

Comment

Hey Chirag,
I think you should consult with a property adviser of your locality. They will give you the right idea.

In budget 2015, Finance Minister has increased the Service Tax Rate from 12.36% to flat. This new rate is applicable from st June, 2015. The rate of Service Tax for services provided before 1st June is 12.36% and for services provided after Ist June is 14%.

Roshni Pawal, Mumbai

24th July 2015

Right Roshini,
But Service Tax can only be levied on Services and not on sale of goods/immovable property & therefore in the above case Service Tax wouldn't be levied on the value of land and would only be levied on the construction service provided by the builder as per the rates in force with currently is 14% applicable from Ist June, 2015.

Kishore Pathak, Mumbai

24th July 2015

Hi,
I am planning to buy a under construction property in Andheri East? What is the revise Service Tax and VAT in Maharashtra on under construction property? Can anybody explain it?

Arup rajan, Mumbai

14th July 2015

Comment

Hi Arup,
Service Tax and VAT applies on all under construction property transactions. However, their actual value varies with states in which the property is being constructed. Presently the rate of service tax is 12%. Taxes like Education cess and higher education cess is calculated on top of the service tax which makes the effective rate of service tax to 12.36%.

VAT are levied on the sale of goods (movable properties). For any sale to attract VAT, it should involve transfer of goods from a person to another. In case of under-construction properties, the transfer of goods applies to the transfer of ownership rights from the builder to you in the form of a sale agreement. VAT is charged at the rate of 1% of agreement value in Mumbai.

Sandeep Mhatre, Mumbai

14th July 2015

http://www.marketexpress.in/2013/10/property-purchase-taxes-in-india.html

Check u will have all details

Kamendra Gupta,

14th December 2015

WHETHER THERE IS ANY LBT is to be paid for purchase of any new construction.

LALCHAND,

22nd May 2015

Comment

Hi,
Any goods which are brought into the Corporation area (import) from outside Corporation area for use, consumption or sale are liable for LBT.

Ketalpujara, Mumbai

24th June 2015

Right Ketal,
A builder is liable to pay LBT. Before paying LBT, a builder has to decide whether he will be constructing on his own or he will be sub contracting the work, again entirely or partly. Also he has to decide on whom the responsibility to pay the LBT will be fixed i.e. on him or on sub contractor. This planning has to be made to avoid double taxation as there is no specific provision of exemption for this purpose.

khushisha, Mumbai

24th June 2015

Any under-construction property that is purchased within India is liable to pay VAT and Service Tax. When a buyer purchases a property, he/she might be asked by the seller to pay service tax and VAT.

Mahendra, Mumbai

14th May 2015

Comment

Hi Mahendra,
When is the Service Tax, VAT and CST compulsory?

Ketalpujara, Mumbai

24th June 2015

Good question Ketal,
Service Tax registration is a function of gross turnover. Once the turnover of the assessee crosses a threshold limit of Rs 9 lacs, the service provider is required to get itself registered under the law, and compulsorily required to charge service tax on services provided once the turnover crosses Rs 10 lacs.

VAT registration is compulsory for dealers having turnover exceeding Rs 5 lacs (or increased limit of Rs 10 lacs in some states).On registration, such dealer is allotted a unique 11 digit TIN (Taxpayer’s Identification Number).

CST registration is not dependent on amount of turnover. Simply put, registration of dealer becomes compulsory once he affects an inter-state sale.

Rajatrawal, Mumbai

24th June 2015

Hey Nitin,
You must know about the taxes on under construction flats. VAT and service tax will push up the final cost of property. So, make your investment with care. You must also budget for service tax and Value Added Tax (VAT) in addition to the purchase price and stamp duty.

Miraniyatin, Mumbai

13th May 2015

Comment

Right Miran,
With a recent Supreme Court order on sale of under-construction flats, there is possibility of demand of VAT where it was earlier not collected for flats sold years back.

Sankalp, Mumbai

13th May 2015

Hello Nitin,
For your knowledge i would like to tell you that whenever you have to pay any property tax then keep it in your knowledge that Stamp duty about 5%, Registration charge 1%, Vat & service tax at 1% and 3.09 % respectively only for under-construction flats, otherwise nil.

Sankalp, Mumbai

6th August 2014

Comment

Hi,
A builder or developer is also now liable to pay service tax if any payments are made by buyers, before the completion certificate is given. If payments are made after the completion certificate is given, then no service tax is payable. Hence if a property is under construction and you as a buyer pay a booking amount, this is considered payment towards sale consideration before completion certificate is given, and hence you will be liable to pay service tax at the rate of 10.30% of 25% of the sale value i.e. 2.575% of sale value.

Sankalp, Mumbai

29th July 2014

Comment