Q:When i purchased the flat in Guwahati in October 2015, the building was ready to move. the builder asked for ST and VAT money and i paid. But builder has not given me any challan yet. Also on similar note, I asked yesterday for the project completion certificate (as i know that after project completion certificate is issued, we dont need to pay ST) , he said they have applied for Completion certificate. How can they apply for it now one year residents started moving in? Did they builder play a foul game? What is the possibility? What should i do?
Latest Answer: Hi folks!!
VAT and Service Tax are not applicable for “Constructed Property”. It is only applicable for under construction flat. Secondly, VAT may vary from state to state as it is state subject but service tax is uniform across country i.e. 15% as it is fixed by Govt of India from !st June 2016.
Latest Answer: In Technical terms CC means Commencement Certificate and not completion certificate. YES, builder HAS to charge Service tax and VAT for flats sold even before or after obtaining CC. once the building is complete, government issues OC which means Occupancy Certificate, and flats sold / registered after that are free of Service tax and VAT.
Q:The total agreement value will be Rs.10000000/- approx. Builder has got CC but not OC. Now I would like to know what Rate of VAT and Service Tax is applicale and on which amount. I came to that since the builder got CC no VAT or Service Tax is payable. PL enlighten me the actual position of these inditrect taxes.........For your information area of flat is 780 sq.ft Carpet and 873.6 is Built-up...
Latest Answer: Hello Sir,
Service Tax and VAT are paid only for under construction properties. And Land cost is exempted from both these charges.
A property is termed "under construction" till the builder receives a "completion certificate" from the relevant authorities. If the entire amount for the property purchase is paid after the receipt of a completion certificate, there would be no service tax levied on the purchase of the property.
Latest Answer: Hi Aquib,
Before taking any legal action, check you agreement whether there is any clause mentioned for compensation on delay possession and secondly, interest on service tax. If it is mentioned then consult a good legal expert and follow what he says.
Q:HiI had purchased a flat in taloja in sep, 2013. Builder has already got occupation certificate from CIDCO in oct,2012. Now he is demanding vat tax 1% from me. Without that he will not give possession to me.. I have already paid other dues. Pls suggest do I need to pay vat tax 1% to builder.
Latest Answer: Hi folks,
Is Vat and Service Tax is applicable on ready-to-move-in property, single residential unit, independent house, villa, bungalow and low cost housing? Should builder issue two separate receipts for both VAT and Service Tax?
Q:I recently booked an under-construction apartment (95% work done) of super built up area 970 Sqft. in Bangalore. The builder sales guy calculated Service Tax (12.36%) on 25% of construction value ( Flat Cost + Car Parking - Land Cost). But after booking during agreement he is saying that norms has changed now and service tax will be charged at 40% of the construction value. He is saying that norms changed since 1-Jul-12 however they did not get confirmation and now only got the confirmation. Please suggest what is current service tax rule is. He is making 2 agreements (1 for land and another for construction). And he did not reveal the modified service tax till I paid booking amount. Also he is asking for 4% VAT on Construction Value. Is it correct and is saying that later on he may charge service tax on maintenance cost as well. Please advise.
Q:I booked a property in 2008 and made 80% of the payment by 2009. Please let me know:
1) Shall I be paying service tax on the payments made by 2009.
2) Now the property is ready and the builder is going to hand it over in the month of Jan 2012. The builder is asking for payment of service tax and VAT for payment towards 12 month advance maintenance, corpus fund and also on legal charges. Is it correct?
Q:I have recently booked an under construction property, only the first slab is completed.I booked this property by paying the builder 20% of my flat cost, also I paid him the service tax at 3.09% and VAT at 1% on this amount (i.e. 20% of the flat cost)Now he is asking me to pay the remaining 80% of the service tax and VAT in advance (i.e. on the full agreement value) and says that this is required for getting the stamp duty & registration done.Please guide if I should pay the entire service tax and vat amount in advance or should it be paid to the builder in parts as per the completion of the project and as per the bank disbursing the amount on completion of each slabTotal Property Cost - 4027500
Paid - 805500
Remainder will be paid by the Bank on completion of each slab
Service Tax Paid - 24889.95 (On the amount paid to the builder)
VAT Paid - 8055 (On the amount paid to the builder)
Completion of Project - 1st Slab
Total Floors - 7
Locality - Mira Road
Stamp Duty Registration not done, Builder is asking me to give the remaining ST and VAT on the entire agreement value before the Stamp Duty & Registration is done i.e.
Service Tax - 99560
VAT - 32220
Whereas I understand that Service Tax and VAT will be paid on the amount disbursed by the bank at the completion of each stage of construction.