Hi,
I booked a flat on october 2009 and stil the construction is going on. Due to service tax amendment on last year
budget, we received an intimation from our builder saying that we need to pay the service tax. We have paid
90% of the amount on july 2010 and the remaining 10 % we have paid this year. But the flat handing over is yet
to be done, Most of the works are done, they are waiting for the completion certificate. Our project comes under
workers contract, and it consists of 60 flats.
We appointed a service tax consultant and he clearly told us that we are not liable to pay service tax , we conveyed
the same to the builder. They didnt accept initially but later they asked us to pay the service tax as a caution deposit,
this deposit will be an escrew account means both builder and buyer needs to sign to take the amount from this account. We clearly told them that we are not liable to pay service tax and will not pay the service tax, but builder is not accepting and want us to pay the service tax as a caution deposit. They also appeal to service tax that we are not liable, and if they accept then we will repay the amount to the buyers, or else if they want us to pay then the builder will pay it to the department.
Finally we are in a position to pay it as they are not handing over the key purposefully for paying the service tax. Please guide me on the applicability of service tax and how can we proceed on this.
Thanks
karthik
CAclubindia
