Service tax on under-construction property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2010 Hi,
I have booked a flat in May 2010 but agreement is not yet done.Now the builder is saying that from 1st july service tax is applicable. Flat costs Rs.2000000/-.(out of which 300000 are payable at the time of possession) what are the provisions of service tax regarding this? and on how much amount I will have to pay tax?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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25 June 2010 Service tax will be payable on the outstanding amount payable only and not on the payments already made.

So service tax to be paid only on Rs. 300,000/- and the rate of service tax will be 2.58%