Is service tax is applicable in transfer charges

Is service tax is applicable in transfer charges of under construction flat ?
During the sell of registered under construction flat (payment done 90%) builder is asking transfer charges for providing the NOC. he is also asking 14% service tax on transfer fees, is it applicable?
Asked 1 year ago in Service Tax from Navi Mumbai, Maharashtra
Yes, service tax @14% is applicable for transfer charges payable to builder.
Ankit Jain
CA, New Delhi
32 Answers
4.4 on 5.0
  Talk to Ankit Jain
No service tax is not payable on transfer charges for providing NOC for transfer of under construction flat.
Vijay N. Kale
CA, Hyderabad
248 Answers
4.9 on 5.0
  Talk to Vijay N. Kale
Firstly, You need to check that whether transfer charges paid to builder is legally valid under the following acts or not
1. Transfer of Property Act, 1882
2. Indian Contract Act, 1872
3. Competition Act, 2007
In most of the above acts, transfer fee to builder is illegal in certain cases.

If not so, then you may have to pay service tax.

For any other query, you may contact us at : ca.skagarwal@gmail.com
Shiv Kumar Agarwal
CA, Delhi
195 Answers
5.0 on 5.0
  Talk to Shiv Kumar Agarwal
yes there is no element of service in transfer of under construction apartment.
Vijay N. Kale
CA, Hyderabad
248 Answers
4.9 on 5.0
  Talk to Vijay N. Kale
If it is written in agreement, still it would not be legally binding on you.
Rest is on your decision whether you agree to pay or not.
Shiv Kumar Agarwal
CA, Delhi
195 Answers
5.0 on 5.0
  Talk to Shiv Kumar Agarwal
You cannot collect service tax by contractual agreement between the parties. For collection of service tax there should be a sanction of law. The collection of service tax which is not authorised by law is illegal. kindly caution your builder, he must be indulging such acts on higher scale.
Vijay N. Kale
CA, Hyderabad
248 Answers
4.9 on 5.0
  Talk to Vijay N. Kale

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