Service Tax & VAT for under construction property(flat) ??

POSTED BY Raghavendra Nainala ON July 20, 2012 3:40 am ONE COMMENT

Hi All,

I wanted to understand on how service tax is being charged on under construction properties(flat)
The builder of the property we have identified is charging Service Tax @ 4.944% on the construction cost and 12.36% on other amenities like registration charges, club house, EB charges, Piped Gas, Legal Valuation, Assessment Charge etc.,

Reading some of the threads on Jago Investor and other articles on the net that service tax is calculated @ 12.36% of 25% of Gross Value of the Property.
Any idea what are the costs that will get included in the Gross Value of a Property ?? Registration Costs is it included??

The way the builder is charging above is it correct ?

VAT is 2% of the total construction cost ?

Any help will be useful. Thanks!

Details of the Property –
UDS – 801 sqft
Guideline Value – 1650
Land Cost = 1321650
Construction cost = 2935150
SBUA – 1252
Sq.Ft Rate= 3400
Basic Cost = 1252*3400 = 4256800
Car Parking – 200,000
Total Basic Cost = 4456800
Registration Cost = 112340
Club Charges – 100,000
EB Charges – 35000
Property Assessment – 25000
Legal Charge – 20000
Piped Gas – 18780(@15sqft)
Govt Infra Charge – 31300(@25sqft)
VAT = 58703
Service Tax = 194403

The property is in chennai

Regards
Raghavendra

One reply on this article “Service Tax & VAT for under construction property(flat) ??”

  1. Dear Raghvendra, Service Tax should be charged only on following items –

    Land Cost
    Construction Cost
    Car Parking
    Piped NG

    All other items are not meant for Service Tax calculation.

    Thanks

    Ashal

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