Service Tax on Apartments

This query is : Resolved

JAGADEESH GOVIND (Querist)
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12 March 2009 Dear Sir,

My query is related to Circular No.108/02/2009 dated 29/01/2009 by ST Department.

I had entered into two agreements with a Builder for sale of undivided share in the land and a constrction agreement for the construction of Apartment and I am paying consideration in monthly instalments.No sale deed has been executed in favour of me.I had already paid 40% of the amount which includes Service Tax.

My specific doubt is:-

Whether I have to continue to pay Ser.Tax as per the second agreement for the value of apartment as the second agreement with the Company is a construction agreement and the Circular didn't mention anything about construction agreement for residential units.

Kindly advise me.

Regards,

JAGADEESH

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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15 April 2009 In my view since the apratment is for your persoanl use and the psosession would be given only after completion and full payment it is also a transaction in IP. Therefore you should not pay for the future.
If the amount of ST paid for the past is substantial then you may opt for refund. It takes time and effort presently.