Murtuza Ali Rajkotwala: Awareness to buyer about Service Tax

Murtaza Ali Rajkotwala statement on payment of service tax, he says that Service Tax on sale of Apartments Till date, Service tax is levied by the Central Government on the construction services offered by the developers to buyers. Presently, Service tax is 15.0%. Service tax is applicable on almost all services that a consumer avails, including buying an under-construction property. This is so because, in the case of an under-construction property, the developer is deemed to be the provider of construction services to the home buyer, and hence service tax is charged on the cost of construction. It is not charged on the entire value of the property but only to the extent of the cost of construction. This means that cost of land is excluded. If the builder has collected any amount as service tax from the buyers by fraud and /or cheating for taxable service as defined in Section 65(105)(zzzh) of the Act and has deposited the same with the government authorities. Any such amount deposited shall be refunded to the buyers.