Service Tax Calculator for Under Constructed Flats or House. Service tax on purchase of flat from builder is reality . When a person books a flat from a builder , it is an order of construction.What you do is to buy the proportionate share in the common land and give a contract to build a flat in a common building to the contractor. The Government imposes service tax for new home purchase on the amount of value charged by the contractor for construction service and not on the value of goods i.e land and other materials used . The rate of service tax is 12.36 % ( inclusive of cess) .
Abatement Scheme of Service Tax on Flat Purchase
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The difficulty arises because the builder does not charge a person separately for land , materials and his service . So , if the values can not be segregated by the builder , how the service tax can be computed. In order to solve this problem, the government came with a general formula to estimate such values . This is commonly known as service tax abatement scheme on under construction properties.
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