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No Service Tax for Residential Property, says Finmin
| September 5, 2007 |    (8 votes, average: 2.75 out of 5) Loading ... |
The release of the much-awaited clarification exempting builders, undertaking residential development, from the service tax has brought a time to rejoice for property buyers.
In a protest against including real estate industry in service tax net, two Pune based developers’ – the Promoters and Builders Association of Poona (PBAP) and the Marathi Bandhkam Vyavasayik Sanghatana (MBVS) had earlier filed a case in the Bombay High Court. These companies on Saturday received copies of the Finmin circular dated August 23, 2007.
The real estate industry was included in service tax net in the Union Budget 2005-06. However, the rule drew severe criticism from builders and central excise officials who had been debating whether service tax can be levied on residential properties with more than 12 tenements.
The latest circular released by Finmin excludes developers/builders from collecting service tax from property buyers in the light of the fact that the construction is done by employing direct labor.
On the other hand, if developers had employed the services of a contractor, it is the contractor who will have to pay service tax and not the developer.
The circular is based on the ‘comprehensive review’ of all technical issues pertaining to service tax by a special committee headed by T.R. Rustagi, Ex-Chief commissioner, Central Excise.
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news required on the service tax issue on residential propoerty
Last year I paid service tax while buying the apartment, do I get the money back?
I have paid the amount of Rs.30000 in the the year 2005-06 towards service tax to my builder in the form of deposit. When confirmed with my builder he said that notification/circular has not yet released by the CBEC clarifying the exemption. Why is govt. slow in issuing the Circular. Kindly confirm the Circular that exempts the builders from collecting Service Tax from the property owners.
I purchase the flat in the jaipuria sunrise green indirapuram (gzb)of 2+1 of 1161 sq ft. in jan 2005 the possesion time for the same is 30 th sep 2006 in case of delay builder agreed to give us the penality of rs. 5 per sq ft. for every delayed month but now he is adjusting from jan to august he is also demanded rs 168 per sq ft as additional charge he is also demanded rs. 56000 as service tax for the same property for clearing the dispute i paid all of this but is there any procedure to take refund for that