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.
When you buy a flat you buy two things from the builder 1. Undivided Land of Share and 2. The flat. Both VAT and Service Tax (As on Jan 2013 ...Service Tax @ 12.36% on 25% of BASIC Price ( if Land Cost is included ) otherwise 12.36% on 33% of Basic Sale price ) need to be paid on no 2 and not on no 1. Make sure you get a TAX invoice for those if builder is not giving you the TAX invoice then dont give those amount.....rest of the things as KTPCL+BWSSB + AMMENITIES are chnarged at 12.36% ....BUT Parking could not be chnarged for service tax as , as per SC decision Parking slot is not an extra service but the part of construction itself
Hi Indrajit,
Where can i find the related citing or documents ( of supreme court decisions & BBMP) on this?
Thanks,
30th September 2013
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