Q:Dear OneI am purchasing a ready to move flat in Bangalore worth Rs.3500000/-(Near Kempapura, Hebbal) kindly help me in understanding to know at what rate and on what amount the VAT and service taxes are charged. Also, i learnt that, if the construction is completed, there is no need of paying any VAT and service tax by the buyers. Am i correct, if not please correct me and assist me with providing detailed information about VAT and service Tax on purchasing a flat in bangalore
Latest Answer: When you buy a house, you pay for two components:
1) Value of land
2) Construction offered by the developer (service provider)
Service tax is payable only in case of construction services and not on the value of land. In cases where it becomes difficult to ascertain cost of immovable property and service cost separately, government has come up with the provision of abatement scheme where an amount is levied on the total amount.
