30 March 2009
Dear Sir, I am seeking clarification related to Service tax on Construction. I booked an apartment in Chennai during June '08 through "Agreement to Sell". Total apts in the complex is 56. During Aug '08, I registered the same through "Sale Deed". I have the break-up of land (i.e. the cost as in the stamp paper) and construction cost, as provided by the builder. Considering the recent circular, Should I have to pay service tax through Builder. If so, how do i calculate based on the cost available with me. This calculation will help me to verify the amount requested by builder. Secondly, can i ask for service tax receipt in my name from the builder. Your response will be highly helpful. Regards, Bhaskar
03 April 2009
The circular clarifies that ST on residential apartments is not liable because: 1) There is a transfer of immovable property which is not a subject matter of ST. 2) There is a contract of construction for personal use ( yours) therefore there is no liability as the deifntion of residential complex excludes building for personal use. You need not pay the builder as per this for the past also. People who have paid have been filing refund claims for the same.
CAclubindia
