Join us on Facebook
Become a GFWA member

Site Announcements

Invitation to RPS SAVANA Allottees to join Case in NCDRC against RPS Infrastructures Ltd


Have you submitted a rating and reviewed your project?
Rate & Review your project now! Submit your project and review.
Read Reviews! Share your feedback!


** Enhanced EDC Stayed by High Court **

Forum email notifications...Please read !
Carpool from Greater Faridabad to Noida
Carpool from Greater Faridabad to GGN


Advertise with us

Discussions related to Real Estate matters, Real Estate laws, loans, financial queries

Service Tax Relief for Under Construction Flats by Delhi High Court

Postby webmaster » Thu Jun 09, 2016 12:48 pm

The Delhi High Court has said home buyers cannot be charged service tax on payments made towards purchase of under-construction apartments from builders if the total value of the apartment includes the land value.
However, service tax can still be levied on preferential location charges (PLC) that builders charge from buyers.

The court also said if the developer has already collected service tax, buyers would be refunded the amount with 6% rate of interest by the revenue department of the government of India.

Since the amendment introduced by the Finance Act of 2010, the government charges service tax on buyers of apartments in under-construction pro jects. Service tax is levied only on 25% of the total value of the apartment due to a 75% abatement that is allowed. So at 15% service tax applicable from June 1 this year, the buyer pays service tax of 3.75% on the total value of the apartment.

Vaibhav Gaggar, partner at law firm Gaggar & Associates, said all home buyers will be entitled to seek a refund of service tax component that has been charged. “Developers, in turn, will be entitled to seek a refund from the government,“ he said.He, however, also said this order is likely to be challenged in the Supreme Court by the government.

Builders point out that they pay service tax for all services such as design, contracting, legal and others while constructing a housing project. They get an offset for this amount through the service tax collected from buyers. Now they will have to treat it as a cost and pass it on to home buyers.

“If we are not collecting service tax from buyers, it would mean passing on our service tax burden to buyers,“ said Ashish Sarin, CEO of Gurgaon-based builder Alpha Corp Development.

http://epaperbeta.timesofindia.com/Arti ... 2016007035

Copy of High Court Order
User avatar
webmaster
Site ADMIN
Site ADMIN
 
Posts: 950
Images: 56
Joined: Fri Mar 06, 2009 5:24 pm
Location: New Delhi

Re: Service Tax Relief for Under Construction Flats by Delhi High Court

Postby anuj020676 » Sat Jul 16, 2016 7:55 am

Vaibhav Gaggar, partner at law firm Gaggar & Associates, said all home buyers will be entitled to seek a refund of service tax component that has been charged. “Developers, in turn, will be entitled to seek a refund from the government,“ he said.He, however, also said this order is likely to be challenged in the Supreme Court by the government.

Does anybody know this order has been challenged in the Supreme Court by the government or not, as more than a month has passed.
RK Jain
User avatar
anuj020676
GFWA Member
GFWA Member
 
Posts: 40
Joined: Fri Mar 23, 2012 6:04 pm


Return to Real Estate Matters

 


  • Related topics
    Replies
    Views
    Last post

Who is online

Users browsing this forum: No registered users and 2 guests

cron