Service Tax & VAT liability

Hi,
I have purchased a flat (from land owners share) for which OC was received on 17th May 2016.
I have made following payments to land owner,
1) 1st Payment of 5 lakh on 1st May 2016
2) 2nd payment of 10 lakh on 14th May 2016
3) Agreement of sale dated 3rd Jun 2016 registered on 4th June 2016 (Stamp duty and registration paid on 4th June)
4) Home loan payment of 52 lakh on 4th July 2016

Since Agreement of sale (Rs. 70 lakh)  was entered after receiving OC am I liable to pay Service Tax and VAT. If yes then is it on the entire consideration amount (70 lakh) or only for the payment made before receiving OC. I guess VAT is not applicable since Agreement of Sale is after OC.

Please revert back with your valuable comments. Thanks
Asked 5 months ago in Service Tax from Mumbai, Maharashtra
Hello Sir,

On the basis of the information provided by you since your agreement for Sale is after the date of OC, then you are not liable for Service Tax or VAT. 

Talking about the payment made before the date of OC, the builder can show it as an Advance instead of the booking amount in his books. But many builders still ask/ demand for VAT/ Service Tax. This is something you will have to sit and discuss/ negotiate with your builder.

Trust this clarifies your query. 

Please feel free to call/ get back in case of any further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP 
Rohit R Sharma
CA, Mumbai
719 Answers
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  Talk to Rohit R Sharma
Dear Sir,

As I said earlier, you are not liable for Service Tax or Vat from the date OC is received. But negotiation is something which you will have to do in order to not pay the dues.

As it involves cost, time and many other factors to fight such issues out. Fact wise you are correct on your stand.

Trust this clarifies your query. 

Please feel free to call/ get back in case of any further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
719 Answers
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  Talk to Rohit R Sharma
If your agreement for sale is after the date of OC, then you are not liable for Service Tax or VAT.
Abhishek Dugar
CA, Mumbai
766 Answers
5.0 on 5.0
  Talk to Abhishek Dugar

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