Legal Question in Tax Law in India

Service Tax on Purchase of a Flat

I have been purchasing a Flat from the Builder at Bhubaneswar since 2006 by paying the regular installments.I have been asked to take possesion shortly by paying the remaining installment of Rs.2.2 lakh and the service tax.

The cost of the Flat including the Car parking space is Rs.23.20 lakh for a Super Builtup area of 1583 square foot.The plinth area of the flat is 1330 sq. feet approax.The price of Rs.23.20 lakh is also inclusive of the cost of the proportion part of the land on which the apartment is built.The apartment has 24 flats on its first to third floor and has a commercial complex on its Ground floor.

I want your valued advice regarding the amount of Service Tax to be paid to the builder vis-a-vis the ammendment of the Service Tax rules and the basis of Calculation.

Thanks


Asked on 3/03/09, 5:47 am

1 Answer from Attorneys
Tapas Misra INDUS LAW

Re: Service Tax on Purchase of a Flat

Since you are simply buying a flat from the builder, no service tax is payable by you to the builder. Even the builder is not liable to pay service tax to the government. This position has also been recently clarified by the government in a circular No. 108/02/2009 dated 29th january 2009.

Ask the builder not to charge service tax from you.

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Answered on 3/03/09, 6:14 am


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