M Sabin Mathew TO 1 recipient Service tax on buying an under construction flat in bangalore

[Sabin Mathew]

Sir,

I am planning to purchase an under construction Flat in Bangalore. I got the draft copy of the sales agreement (Dual agreement). As per the agreement base price (price / sqft * super built up) is 33Lakhs (the UDS of Land value is 8 Lakh and the cost of construction is 25 Lakhs).As per the Builder sales tax (VAT) @ 9.5% of 70% Basic and Car Park Value [9.5%*(70%*(3304800+150000)) = 229744] and service tax 12.36% of 30% of Basic and Car Park and other charges [12.36%*(30%*(3304800+150000)) = 128104].

Could you please tell me whether the formula to find the service tax and VAT is true? I understand the builders are not suppose to calculated the Service Tax on the base price and it should be on the cost of construction.

Thanks in advance

AI Summary

Clarification Sought on Service Tax and VAT Calculations for Under-Construction Flat Purchase Agreement An individual is considering purchasing an under-construction flat in Bangalore and has questions regarding the calculation of service tax and VAT as per the sales agreement. The agreement lists a base price of 33 lakhs, with the land valued at 8 lakhs and construction at 25 lakhs. The builder has applied VAT at 9.5% on 70% of the base and car park value, and service tax at 12.36% on 30% of the same. A respondent clarifies that service tax can be calculated as 12.36% on the service portion of construction costs or 12.36% on 25% of the total value under certain conditions.