Hi,
We are paying some amount to a Builder towards completion of a part activity. Flat is not yet handed over to us, which will take a long time for them for complete finishing and handing over to us. The builder is raising a Tax Invoice and claiming Service Tax. Do we need to pay service tax, since flat is under completion and not handed over.
If No, pls provide any notification / circular or corresponding rule.
Thanks
Saket
Service Tax on Under-Construction Flats: Applicable Unless Post-Completion Certificate; Delhi Ruling May Offer Grounds to Challenge. A user inquired about the obligation to pay service tax on a payment made to a builder for a flat still under construction and not yet handed over. Responses indicated that service tax is generally applicable to under-construction properties. However, a Delhi High Court case suggested it might not apply to flat purchases, though this does not extend to Maharashtra. It was advised that if the flat is in Delhi NCR, the user could challenge the service tax based on the court ruling. Additionally, service tax is not needed if the purchase occurs after obtaining a completion certificate. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
