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- Service tax
Hi, I would like to know about service tax on under construction Flat/Property? As of my knowledge HC grants interim stay on Service Tax levy on buildings under construction. Is it right? still stay is there on Service Tax or We have to pay? Please do let me know.
- service tax
What is current status of the service tax? is it applicable? if Yes, then from which date?
- There is another thread where Sharpj has given detailed explanation. Search for thread with key words service tax. You will get details there.CommentQuote0Flag
- Hi Pankaj,
Your post talk about the interim stay by high court on ST. But the last paragraph of your post mentions "Flat buyers now have to pay approximately 2.5% as...". Confusing?!?!
MechEngineer:bab (34):Originally Posted by pankajlawsMUMBAI: In a temporary relief to home buyers and developers, the Bombay high court has granted interim stay on service tax on under-construction buildings, which was challenged by the Maharashtra Chamber of Housing Industry (MCHI), an umbrella organisation of 500 developers. The matter is posted for hearing on August 3.
Admitting the petition last week, a division bench of Justices V C Daga and S J Kathawala granted interim stay until further hearing. The MCHI and others challenged the constitutional validity of the Finance Act 2010, which sought to introduce the concept of service tax on under-construction buildings. But the MCHI contended that the sale of a unit, as per the settled laws dealing with transfer of property, could not be deemed a service.
"Sale by the builder should not be treated as a service, as service tax is levied ultimately on the property," said the MCHI. Senior advocate Rafique Dada appeared on behalf of M/s Parimal K Shroff & Company for the MCHI in the court.
In its interim order, the HC stated, "No coercive steps shall be taken against the petitioner for the recovery of service tax in relation to the provisions in question... but assessment may proceed in accordance with the law." This allows the government to carry on service-tax assessment.
MCHI president Sunil Mantri expressed satisfaction over the court's ruling which he said was "in the interest of the common man". "Any such levy will increase the cost of the flat and ultimately the buyer will have to bear the brunt," Mantri said.
Flat buyers now have to pay approximately 2.5% as service tax on the total value of their flat. "If the value of a flat is shown Rs 1 crore in the agreement, the home buyer will have to shell out an additional Rs 2.5 lakh as service tax," he said.CommentQuote0Flag
- There is still a stay on Service tax.
But on 18th Feb 2011; the court ruled out that the service tax has to be deposited to Prothonotary & Senior Master/Registrar attached to Hon'able High court.
So instead of builders collecting the money and keeping it to themselves; the money would be deposited at High court Prothonotary.
Hence; you may hear it from the builder that the service tax has to be paid. But as home buyers; you need to make sure that this money is properly deposited to the ProthonotaryCommentQuote0Flag
- How ot make sure
How to make sure that this money is properly deposited to the Prothonotary?
Do we need to ask builder about any evidence.CommentQuote0Flag