Service tax on purchase of apartment

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  1. Narayan Kumar Kundu

    Narayan Kumar Kundu New Member

    Dear all,

    My daughter had purchased a flat in Kolkata which was ready to move in. The registration of the flat was completed and possession given in June'13. Now, in Jan.'14 the builder has sent a letter asking her to pay about Rs. 1 lakh towards service tax.
    Is she required to pay the tax? There is a provision in the agreement that in case the government imposes any tax etc. in future, the same has to be borne by the purchaser.
    Can any one inform, in case she does not pay the tax what penal action can be taken against her by the builder and the concerned tax authorities.

    Narayan Kumar Kundu
  2. If there is an agreement for any tax to be paid, then you have to service tax. It is my opinion.
  3. Neha Sharma

    Neha Sharma Active Member

    Service Tax on Construction was introduced in the year 2010.

    And your agreement very specifically states that in case the govt enforces any tax etc in future.

    In your case, as service tax on construction was already in force on the date of sale and this is not something which has been introduced in future, the developer does not have any legal right to collect Service Tax from you.
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