• Service tax before execution of Sale Agreement

Hi ,
I have booked a flat in an apartment in Mumbai on the 16th floor. The IOD is upto thr 12th Floor only. Therefore no sale agreement has yet been executed.However,the builder is demanding payment of service tax for 50% of work completed.Should I make the payment? 
Also he is dilly dallying the IOD approval from the municipal corporation in Mumbai. Is there a way to check whether he has made payments to seek IOD? Also how can one cross verify payments have been made by the builder as service tax to the department
Asked 7 years ago in Taxation

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3 Answers

insist on sale agreement be executed before you make any payment

2) file RTI with muncipal corporation as to whether any payments made by builder to seek IOD

3) Service tax is paid on monthly / quarterly basis to service tax department

4) builder can give you stamped receipt with his service tax number as to proof of payment of service tax

Ajay Sethi
Advocate, Mumbai
95197 Answers
7607 Consultations

5.0 on 5.0

1. The service tax is payable for the purchasing of a under construction flat with which OID has no issue.

2.You cna file RTI in the Municiplaity to check whether he ahs applied for IOD or not.

3. You can get the service tax information through RTI also.

Devajyoti Barman
Advocate, Kolkata
22920 Answers
497 Consultations

5.0 on 5.0

If there is no sale agreement executed between buyer and the builder then he cannot demand service tax, because this will go unaccounted and you may have to pay it once again afresh on a fresh demand at a later stage.

Buying a flat can fall into two different categories: a) when the building is under construction, and b) when the building is completed.

When a building is under construction, the Maharashtra Ownership of Flats Act (MOFA) applies. This requires the builder to enter into an agreement in a specified form and attach a Commencement Certificate (CC), which in Mumbai means the IOD (Intimation of Disapproval) and CC.

So now you tell what you want to clarify about IOD i.e., intimation of disapproval approval.

For cross verification of payment of service tax you may obtain the TIN No. or the transaction details from the builder and cross verify the same with the authorities concerned.

T Kalaiselvan
Advocate, Vellore
85398 Answers
2235 Consultations

5.0 on 5.0

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