Regarding service tax

[Prateek Agrawal]

Dear Sir.

I booked a flat in Bhopal from Bhopal development authority in the year 2011 and paid installment as per terms & condition up-to 2013 to the tune of ₹ 4860000/- . Total cost of flat ₹ 6350000/- BDA has issued a demand letter and asking for remaining amount . The BDA classified cost of land and construction cost. on the remaining amount they are charging GST @ 12 % and also charging service tax @ 4.5% on ₹ 4860000/-installment paid by me. My question is that whether they can charge service tax @4.5% on installment paid by me .Service tax is chargeable @ 3.75% on gross value instead of 4.5% as the value of property is less than 1 cr. and assuming carpet area less than 2000sqft.

AI Summary

Service Tax on Installments: Bhopal Development Authority Overcharges? Clarification on Applicable Abatements and Conditions. A forum participant inquired whether the Bhopal Development Authority (BDA) can charge a 4.5% service tax on installments paid for a flat booked in 2011. The participant noted that service tax should be 3.75% given the property value and carpet area. The response clarified that under the applicable notifications, the service tax should be based on 25% of the gross amount if both the carpet area is under 2000 sq. feet and the property value is under 1 crore, allowing for a 75% abatement. If only the carpet area condition is met, a 70% abatement applies.