Service tax & vat applicability on construction

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Dear all,

My Query is regarding APPLICABILITY OF SERVICE TAX.

example:- Mr. A paid token money of Rs. 51000/- in January 2011.

He got Architect's certificate of 100% completion in February 2011

Flat registered in March 2011.

Mr. A paid Rs.63000/- to builder in Aug 2011 before getting possession of flat.

is Mr. A was liable to pay this service Tax?

can he claim this Service tax back from the builder.

kindly reply with applicable circulars/notification/applicability to fight with builder for refund of the same.

Thanks & regards,

Daxa Manek

Replies (1)

Dear Daxa,

Since, Mr. A paid the amount in advance, this means that the builder was working on behalf of Mr. A and hence in my opinion, service tax would be applicable on the whole of the ageement value.

Only if there is a resale or the sale has been after the completion of the flat, no service tax shall be applicable.

Hope I have made myself clear.


CCI Pro

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