A.L.Chaudhary (RETIRED) (47 Points)
17 March 2013Buyer booked apparment in 2007 and paid 95% value 2007 and signed Agreement in 2007.Possession of appartment is yet to be given. Possession may be some times in 2013. As per agreement scheduled time for possession was September 2009.. Now builder is demanding payment of service Tax.As per agreement at the time of taking possession blance 5% and registration charges are to be paid. Now if buyer does not pay service tax he does not get poassesion.. What redmedies are availble to buyer now.
TKKKKKK
(PRACTICING CA)
(3268 Points)
Replied 17 March 2013
buyer has to pay service tax.as buyer had paid before competion of construction.
MJ Krishnamurthy
(ACCT(Retd))
(7197 Points)
Replied 17 March 2013
Mr AL Chowdhury,
A builder can collect ST and VAT from buyers of apartments.You say they demand ST now and what is that 5% while taking possession. That may be VAT.Now please note that the price of an apartment involves cost of land (30-40% of the total),amenities (10%),like a club,security,lift,swimming pool, a park which are not sold to you. Payment of deposits to statutory bodies like for water and electricity are also collected. These amounts are not taxable.After removing such charges from the total value you get the construction cost. If under composition 4% vat and 4.12 % ST are applicable on the entire construction cost. Otherwise,70% of that value is chargeable 12.5% VAT (or at the state rates) and 40% ST. at the respective rates........mjk
Landmark Judgments: Important Provisions of the EPF & ESI Act interpreted by the Honorable Supreme Court of India
CAclubindia
