Sunshine Hills2- I am impressed by the project, let me know about the service tax payable for this property?

Q: 1 bhk at nibm annexe

Sana Rizvi ,

26th June 2017

Property Tax in Sunshine Hills Phase II A5, Pisoli, Pune

service tax in pune

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Replies (2)

Hi Sana,
Service Tax is levied by the Central government on the construction services offered by the developers to buyers. At present, the Service Tax rate in India is 15 per cent.

Nikhil Kanetkar, Pune

10th July 2017

Comment

An under-construction property can be divided into three parts. The first part is the cost of the land and calls for no VAT or service tax. The second part is the cost of material which is liable for VAT. The third part is the cost of construction and involves labour charges and can be treated as a service that is rendered by the developer to the purchaser. Therefore, service tax can be levied on this component. You have to pay service tax at the rate of 4.5%.

Upendra Limaye, Pune

10th July 2017

Comment

Apart from that, Service tax is payable only on property purchase directly from developers and is not required in the case of resale property purchase, as there is no service provided.
Service tax is not applicable on the construction of a single residential unit such as an independent house, villa or bungalow. Moreover, there is no service tax on the affordable housing segment. Hence, it is not applicable for housing with a carpet area of up to 60 sq mts per house in the housing complex.

Chandra Kantraut, Pune

10th July 2017