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Real Estate Forum on Service Tax & Vat On Under Construction Property

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Latest Answer: No, he cann't charge VAT & Service after getting Completion Certificate. 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.

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.

Q: bought flat with 85% down when they said they will give possession in dec 2012 but now its may 2015 and they need more money in name of service tax inbtrest which they never told us before
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: Hi
I 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 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?
Latest Answer: 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??

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.

Latest Answer: Is the VAT and Service Tax applicable for new flats?

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.

Latest Answer: As per my knowledge, there should not be any service tax applicable for under construction property. Please clarify with your lawyer.

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