Guys, can any of you tell me 'exactly' what's going on with the service tax issue...?? My builder is asking me to pay approx. 2.6% of the agreement value.
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  • Originally Posted by realacres
    Jitu, you can be an exception, but looking at current builders I seriously doubt whether any builder will agree to this.

    Dear realacres,
    Thanks for putting me in the exception list. :)

    Originally Posted by realacres
    Btw, this is an interim stay & doesn't mean that the fin min has reversed the decision. So, it is just postponement of the ST payment as it will have to be paid either today or tomorrow. Btw, what has Credai plans in this regard Jitu?? You must be aware of this being a member of Credai Pune (ex-PBAP).

    When contacted with Credai (PBAP) they said they are deciding on this matter and waiting for the hearing on the writ petition filed by MCHI. Till that time we need to collect ST as per the Central Govt guidelines.
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  • As per my info GK builder has returned service tax cheques to suncrest ph I residants after forming some form of society.
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  • Originally Posted by Jitu_Sir
    Dear nitesh321,
    The interim stay is on 'forceful action of recovery'. Moreover MCHI has filed the writ petition, hence it's applicable to their members only.


    I have booked a flat in Raheja Vista recently and sales person is asking for service tex. I believe K raheja construction is a part of MCHI. Why are they asking for it then? Can you please advise?
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  • Originally Posted by Rishabh_Jain
    I have booked a flat in Raheja Vista recently and sales person is asking for service tex. I believe K raheja construction is a part of MCHI. Why are they asking for it then? Can you please advise?

    Dear Rishabh_jain,
    The interim stay is for 'forceful recovery of ST from MCHI builders'.
    As per Credai (Pune) we have been advised to collect ST and deposit the same to Govt under protest. We are expediating the issue with our consultants.
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  • Originally Posted by Jitu_Sir
    Dear Rishabh_jain,
    The interim stay is for 'forceful recovery of ST from MCHI builders'.
    As per Credai (Pune) we have been advised to collect ST and deposit the same to Govt under protest. We are expediating the issue with our consultants.

    What I don't understand is it is OK for the builders if Govt gives them 'No Income Tax' benefit under 80IB, which runs into crores of additional white money for builders but the moment Govt taxes, builders are up in arms??:bab (22): Atleast for ready possession, ST is not applicable but under 80IB, under-constro + ready poss both gave the builder tax benefit. The income tax benefit was given to builders so that they can pass on the benefit to end users making housing more affordable? Did the builders did this? No. Then why make such a huge cry about ST??:bab (38):

    * PS:- Jitu, this is not against you per se but builder community in general.
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  • Service Tax on infrastruce charges

    Hi ,
    My builder is charging Service Tax on the total amount i.e. base rate + infrastructure charges. Some where I have read ST on IDC and EDC is nil. How can I clarify this ? Is this correct ?



    TIA

    -Rohan
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  • Originally Posted by rohankayan
    Hi ,
    My builder is charging Service Tax on the total amount i.e. base rate + infrastructure charges. Some where I have read ST on IDC and EDC is nil. How can I clarify this ? Is this correct ?



    TIA

    -Rohan


    Hurry now, your builder will ask for more service tax post march since rates have been increased post budget.
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  • Service tax will be 3.09% from 1st April onward, as told by a sales person in one of the projects I visited yesterday.
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  • Originally Posted by priyaj
    Service tax will be 3.09% from 1st April onward, as told by a sales person in one of the projects I visited yesterday.


    I got a mail from Axis bank which mentioned some highlights from the budget. There is new provision for ST in affordable housing. It says 'Exemption in ST on construction of affordable housing projects (< 60 sq.mt. unit size)'. Does it mean if the agreement mentions area less than 60 sq.mt., there is no ST to be paid? Is there any specific condition on the project?
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  • I got a quotation for a project in which the Builder is charging Service Tax 14.5 % for

    1. MSEB Connection
    2. Society Formation
    3. One Time Maintenance for 2 years

    Which of above should ideally be not there ?
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  • Originally Posted by Rohit202a
    I got a quotation for a project in which the Builder is charging Service Tax 14.5 % for

    1. MSEB Connection
    2. Society Formation
    3. One Time Maintenance for 2 years

    Which of above should ideally be not there ?


    My views:

    A. 'MSEB Connection': Service tax (plus SBC) 14.50% is applicable only on service charges of builder (& not against cost of meter / MSEB deposit)

    B. Society Formation: Being builder is under legal obligation to form society, whether 'he can collect any service charge there-against' is itself doubtful.

    C. One Time Maintenance for 2 years: If society is for residential purpose and contribution is less that '5K per month per member', then NO service tax is applicable.
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  • Originally Posted by amit007
    My views:

    A. 'MSEB Connection': Service tax (plus SBC) 14.50% is applicable only on service charges of builder (& not against cost of meter / MSEB deposit)

    B. Society Formation: Being builder is under legal obligation to form society, whether 'he can collect any service charge there-against' is itself doubtful.

    C. One Time Maintenance for 2 years: If society is for residential purpose and contribution is less that '5K per month per member', then NO service tax is applicable.


    Thanks amit007; . Is there a link for point C somewhere that it can be confirmed ?

    I myself was in doubt for A as not a single other builder has quoted MSEB separately, all is included under Infra charges only.
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  • No service tax is applicable for 'residential housing society' if monthly maintenance is less than Rs. 5000/-. Further, further collects this money as 'trustee' of society to be formed and does not become service provider.

    One should not pay service tax on 'maintenance charges' if its a housing / residential society and if monthly maintenance is less than Rs. 5000/- per member.

    Builder should be shown 'Serial no. 28 (c) of Service Tax Exemption Notification No. 25 / 2012'.
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