Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: VAT RATES :: form 3cd :: TDS :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: list of goods taxed at 4% :: cpt :: TAX RATES - GOODS TAXABLE @ 4%
Service Tax »
 Goods and Services Tax (Compensation to States) Amendment Act, 2017.
 Services sector need to brought under Section 72A of the Income-Tax Act
 Simplifying GST: Creating a Grand Simple Tax
 The way ahead for goods and services tax
 Goods & Service Tax (GST): Recent Clarifications
 Tax payers can see status of returns filed on GSTN portal
 Export And Import Of Goods Under GST
 The Finance Resolution And Deposit Insurance Bill, 2017
 Payment made in revenue sharing deal exempt from service tax
 India seen posting stronger growth as businesses adjust to new tax
 GST High Powered Committee On Return Filing - Representation by GST Research Foundation

Service tax haunts flat
May, 25th 2010

Already burdened by galloping property prices, flat buyers are now faced with another fait accompli. For the past one month, many city builders have been asking purchasers to start paying up the 2.5% service tax announced in the Union budget.

For example, if the value of the flat is shown as Rs 1 crore in the agreement, the buyer will now have to shell out an additional Rs 2.5 lakh as service tax.

Despite strong representations made to the Centre by those in the construction industry , the finance ministry is unmoved. Although the official notification from the ministry is expected any day now, market sources say that developers have informed buyers that the possession of their apartments would be held up in case they fail to cough up the amount.

The service tax will be charged on only those residential projects which are still under construction or where a completed building has not received its occupation certificate. A leading developer , not wishing to be identified, admitted that builders were telling buyers to pay this tax. It has created problems and led to bitterness . But the issue is out of our control, he said.

Buyers say they were not informed of the additional levy when they had booked the flats. They are fighting with builders but have little choice. As it is, they are forced to pay the builder hefty parking charges, society fees, development charges and various other hidden costs before he takes possession, said a market source.

Sunil Mantri, newly-elected president of the Maharashtra Chamber of Housing Industry (MCHI), said developers were collecting this tax and putting it in an ESCROW account. As and when the notification comes into force, we will adjust this amount. Today more than 80% of apartments are booked when they are still under construction, he said.

The Confederation of Real Estate Developers Associations of India (Credai) opposed the proposed service tax imposition, saying it would ultimately make buying houses more difficult. Credai has stated that such a move will lead to double taxation.

Credai chairman Kumar Gera said, It is the duty of the builder to collect this service tax from the purchaser and deposit it with the department . The developer is just a postman. It is ridiculous and makes a mockery of the governments thrust on making housing affordable.

Gera further added that the buyer was already burdened with other direct taxes like the stamp duty (5%) and registration charges (1%) on the total value of the flat. A 1% VAT is also in the pipeline. Besides this, the builder has to pay development charges to the local municipal body and this amount could range from anywhere between Rs 100 to Rs 200 a square foot in various towns and cities of the state.

A year ago, Credai had worked out a rough calculation on a pan-India basis to find out the quantum of tax collected by by the local authorities , the state government and the Centre. We found that on an average price of Rs 2,800 a square foot for a residential property, as much as Rs 850 goes towards various taxes, duties and levies, said Gera.

He added the service tax would not be levied with retrospective effect. For those who have booked their flats some time back, this tax will only have to be paid on the remaining instalments and not on the entire value of the flat, he said.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Privacy Policy

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions