Yesterday's newspapers had an article stating that service tax is not payable on sale of flat by builder to customer. I purchased a flat in Mumbai in 2008 & paid 5% VAT on the the total value. Somebody recently told me that some builders are refunding this amount. Can someone clarify as I am not getting any information from my builder.
The finance ministrys Tax Research Unit (TRU) appears to have endorsed the builders stance, though the matter is still sub-judice. The TRU has clarified that a builder or a developer will not have to pay service tax if he does the construction on his own without engaging the services of any other person. In such cases in the absence of a service provider-service recipient relationship, the question of providing taxable service to any person by any other person does not arise, the clarification states.
PBAP of ...more