Service tax on underconstruction flats

This query is : Resolved

Ashish (Querist)
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30 December 2012 Dear all

can you please provide some concrete reply to whether the service tax on basic price is different from service tax on other charges like- ECD, IDC, car parking, IFMS etc.

i checked on internet. some articals say that on above all it should be 3.09%. but flat builders are charging it differently..
one example is as below...

"Service Tax shall be applicable on Basic price @ 3.09%. EDC/IDC will have no service
charges. Service tax on Power Backup / FFC/ ECC/PLC and Club Membership @ 12.36%
(as per the rates notified by the government). Service tax shall be payable along with
respective installment and is mandatory."

is the aboove builder a part of corruption in India?

Kaushik Vinod

Kaushik Vinod (Expert)
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02 January 2013 Answer modified to avoid confusion and given seperatly.

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Ashish

Ashish (Querist)
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08 January 2013 Dear Sir

Thanks a lot for your reply.
As there are many complicated terms in above reply for me as i am not from that field. Request you to kindly clarify.

my doubt was not whether 3.09% on basic is right or not.
" my doubt is on other charges also, it should be 3.09% instead of 12.36% "
because other charges are already included in agreement cost.

the rule is read indicates- 3.09% on agreement cost of flat, not on basic price.

or service tax only on basic needs to be paid according to you?

Kindly suggest.

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Kaushik Vinod

Kaushik Vinod (Expert)
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09 January 2013 Dear Ashish,

The maintenance contracts (FFC,EEC, Power back up)are executed separately and charged separately. This is very difficult to say that these charges are part of main construction, since these start after construction is over.

My view: The other charges ( EEC, FFC etc.)are not eligible for abatement benefits.
This view is little conservative but you may take the aggressive step by claiming exemption on all the other charges.

I have modified the earlier answer since it had some complex terms.

Thanks

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