Service Tax on Property in case of change in Rates

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  1. CShukla

    CShukla New Member

    Hi, I purchased an under construction property in 2014 and the cost break up at that time showed ST component as 3.09% (25% [abatement rule] of 12.36% [applicable ST rate] as was at that time). The payment schedule I received from builder included the instalments with this ST component.
    Now the registration process has begun and the ST stands at 4.5% at this time (30% [abatement revised on April 2016] of 15% [ST as revised on June 1 2016]). I have paid all instalments except the last one. I was under impression that the new ST - 4.5% will be applicable on only the last instalment - since the ST was already paid on older instalments. But the builder insists that the ST is applicable on the total flat cost. I am not sure if this is how things are calculated? Is the new rate of ST applicable on overall flat cost or on the balance portion of cost that is yet to be paid as last instalment at the time of registration? Please advise and also what action should I take if builder's logic turns out to be invalid?
     
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