Service Tax on flat purchase

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  1. suresh chauhan

    suresh chauhan New Member


    I have purchased a flat in under construction building amounting Rs 2956000/- & done the registration on 22nd March'16 ( OC certificate was not issued by municipal body at the time of flat registration ) OC certificate has been issued by municipal body in the April'16 month. ( KDMC - THANE )

    Service Tax & VAT was paid to the builder at the time of registration. but the loan amount sanctioned by bank ( 90% of flat cost ie 2650000 /- ) in the month of May'16.

    Now Builder is asking for the differential amount as service tax rate got hiked from 1st April i.e from 3.625% to 4.35% as he claim.

    Please advise.

    Suresh Chauhan
  2. Viraj Vyawahare

    Viraj Vyawahare New Member

    Hi Suresh, As per my understanding the service tax is paid as per the rate prevailing when the payment is made. So, if you or bank has made all the payment when the service tax was 3.625%, you don't need to pay any additional tax. But as per your post, it seems that bank has disbursed the loan amount in month of May and the prevailing service tax rate was 4.35%, so you are liable to pay the difference. But the difference on the Service Tax will be only for the amount paid in May, 16 and not the 10% component you had paid earlier.
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