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Service Tax..who pays? Builder or Buyers

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Service Tax..who pays? Builder or Buyers

Last updated: March 23 2012
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  • Service Tax..who pays? Builder or Buyers

    Hi,
    Has the rule become applicable to pay 2.58% service tax..or still in stay.
    I read it has to be aid by builder.....so do we need to pay the same or builder needs to pay it.

    Clarification on same is soughted .
  • #2

    #2

    Re : Service Tax..who pays? Builder or Buyers

    The buyer has to pay it .



    The Central Government, vide its Notification No.1/2006-ST dated 1.3.2006,
    as amended by Notification No.29/2010-ST dated 22.6.2010, w.e.f. 1.7.2010
    and Notification No.36/2010 dated 28th June, 2010, has brought the
    “Construction of complexes” under the taxable service net under the
    aforesaid Service Tax Act. Accordingly all Residential or Commercial units
    constructed and allotted/sold are now subject to Service Tax at appropriate
    rate. The rate of Service Tax applicable on various Sub-heads under which
    payments are to be made for the Residential/Commercial/Retail Units are
    given below :

    Description | Applicable Service Tax
    ------------------------------------------+------------------------------------------
    Basic Sale Price (BSP) | 2.575 %
    ------------------------------------------+------------------------------------------
    Preferential Location Charge (PLC); | 10.3%
    club membership; maintenance charge; |
    other charges |
    ------------------------------------------+------------------------------------------
    EDC/IDC; IFMS; IBMS; Car Park | Nil


    The aforesaid Service Tax is applicable on all payments made by you on or
    after 1st July 2010. The payments received upto 30th June, 2010 are exempt
    from the aforesaid Service Tax. It may please be noted that the Service Tax
    is linked to the actual date of payment and not linked with the date of
    Payment Request.
    Please read IREF rules | FAQ's

    Comment

    • #3

      #3

      Re : Service Tax..who pays? Builder or Buyers

      Originally posted by MANOJa View Post
      The buyer has to pay it .



      The Central Government, vide its Notification No.1/2006-ST dated 1.3.2006,
      as amended by Notification No.29/2010-ST dated 22.6.2010, w.e.f. 1.7.2010
      and Notification No.36/2010 dated 28th June, 2010, has brought the
      “Construction of complexes” under the taxable service net under the
      aforesaid Service Tax Act. Accordingly all Residential or Commercial units
      constructed and allotted/sold are now subject to Service Tax at appropriate
      rate. The rate of Service Tax applicable on various Sub-heads under which
      payments are to be made for the Residential/Commercial/Retail Units are
      given below :

      Description | Applicable Service Tax
      ------------------------------------------+------------------------------------------
      Basic Sale Price (BSP) | 2.575 %
      ------------------------------------------+------------------------------------------
      Preferential Location Charge (PLC); | 10.3%
      club membership; maintenance charge; |
      other charges |
      ------------------------------------------+------------------------------------------
      EDC/IDC; IFMS; IBMS; Car Park | Nil


      The aforesaid Service Tax is applicable on all payments made by you on or
      after 1st July 2010. The payments received upto 30th June, 2010 are exempt
      from the aforesaid Service Tax. It may please be noted that the Service Tax
      is linked to the actual date of payment and not linked with the date of
      Payment Request.


      Thnks for the info..really helpful.

      Comment

      • #4

        #4

        Re : Service Tax..who pays? Builder or Buyers

        Originally posted by Jitu_Sir View Post
        Dear amitdejavu,Still haven't received any sound info about Supreme Court order regarding VAT. Will update soon.
        Actually in one of thread, Jitu_Sir said he'll get back to us on the same...

        Jitu_Sir, has the decision been made on this?

        Comment

        • #5

          #5

          Re : Service Tax..who pays? Builder or Buyers

          Originally posted by abhi2509 View Post
          Actually in one of thread, Jitu_Sir said he'll get back to us on the same...

          Jitu_Sir, has the decision been made on this?
          Dear abhi2509,
          Still haven't received any news. Will update you soon.
          Jitendra Pethkar | Pethkar Projects

          Comment

          • #6

            #6

            Re : Service Tax..who pays? Builder or Buyers

            Originally posted by Jitu_Sir View Post
            Dear abhi2509,
            Still haven't received any news. Will update you soon.

            Jitu Sir must be looking for an iota of a hint which could say that the service tax has to be paid by the buyer

            I think that vital piece of news is still eluding him

            Just kidding

            Comment

            • #7

              #7

              Re : Service Tax..who pays? Builder or Buyers

              Originally posted by MANOJa View Post
              The buyer has to pay it .



              The Central Government, vide its Notification No.1/2006-ST dated 1.3.2006,
              as amended by Notification No.29/2010-ST dated 22.6.2010, w.e.f. 1.7.2010
              and Notification No.36/2010 dated 28th June, 2010, has brought the
              “Construction of complexes” under the taxable service net under the
              aforesaid Service Tax Act. Accordingly all Residential or Commercial units
              constructed and allotted/sold are now subject to Service Tax at appropriate
              rate. The rate of Service Tax applicable on various Sub-heads under which
              payments are to be made for the Residential/Commercial/Retail Units are
              given below :

              Description | Applicable Service Tax
              ------------------------------------------+------------------------------------------
              Basic Sale Price (BSP) | 2.575 %
              ------------------------------------------+------------------------------------------
              Preferential Location Charge (PLC); | 10.3%
              club membership; maintenance charge; |
              other charges |
              ------------------------------------------+------------------------------------------
              EDC/IDC; IFMS; IBMS; Car Park | Nil


              The aforesaid Service Tax is applicable on all payments made by you on or
              after 1st July 2010. The payments received upto 30th June, 2010 are exempt
              from the aforesaid Service Tax. It may please be noted that the Service Tax
              is linked to the actual date of payment and not linked with the date of
              Payment Request.
              Thanks Manoja for clarifying so explicitly. Even though I knew the rates, but had not seen this circular, which nails everything down

              Comment

              • #8

                #8

                Re : Service Tax..who pays? Builder or Buyers

                Query on service tax

                Hi Jitu Sir,

                If the building is in construction phase during June,2010 and has been completed till say 80% as on 30th June,2010. Will the service tax amount be 2.5% of the total agreement value or only 2.5% of the remaining 20% of the building which has been constructed post June,2010.
                I have paid all the amount post June 2010 only.

                Comment

                • #9

                  #9

                  Re : Service Tax..who pays? Builder or Buyers

                  What ever amount is paid after 30th june 2010 will attract service tax....

                  Comment

                  • #10

                    #10

                    Re : Service Tax..who pays? Builder or Buyers

                    Originally posted by gotia1 View Post
                    What ever amount is paid after 30th june 2010 will attract service tax....
                    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)'. It means if the agreement mentions area less than 60 sq.mt., there is no ST to be paid.

                    Comment

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