Service Tax on Under Construction Flat

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Ashish Gupta (Querist)
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14 September 2010 Hi

I have booked and Paid 95% amount of the flat in Nov 2009 and Builder is asking for Service Tax on Balance 5% Payment and offered Possesion in Sep 2010.
please let me know the exact ruling of servcie tax on this.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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14 September 2010 Go through the below link, you will have your answer.

Before completion certificate, the construction will be deemed to be in progress, accordingly any payment made after 1/7/10, will attract service tax.

http://www.simpletaxindia.org/2010/07/service-tax-on-construction-service-wef.html

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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14 September 2010 Even the word "after" the completion certificate has been inserted by finance act,2010. That means any payment for service by builder before actual sale, will be deemed as service & accordingly liable to service tax.

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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14 September 2010 Also, if the cost of house is less than 20 lacs, there is no service tax.