I recently purchased a finished flat for 28 lakhs in Hyderabad in which bank has funded 24 lakhs. Now, builder is insisting me to pay 1,80,000 towards service tax and VAT for which I am clueless as why builder is imposing the charges on customer, do we need to pay service tax to buy a apartment? please help me with your inputs.
Appreciate your help.
Sunil TallaAdd to favorites
If you are buying a ready to occupy flat; in case the builder has developed the project to 100% & obtained the occupancy certificate for the same before selling it to you – it’s a product being sold. There is no service component involved in this and hence you don’t have to pay any service charges.
Note: Ancillary services provided by the builder, even if the property is ready to move in, will attract service tax – but only on the service charge, not on property value. Ex. service tax will be payable on property maintenance charges.