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I am Ambika and am working in Bangalore. Here, I booked one flat (and got flat registration based on Undivided land) in Sep-04 which was under construction and expected to be completed in June-06 end. I have paid the gross amount (Flat Value) in 8 installments starting from Sept-04 to June-05 (I am supposed to pay sales tax in last week of June-05) I came to know that service tax is now applicable on Flat purchased from 1st June 05. I am in doubt whether I have to pay service tax or not. Please clear my doubt and let me know whether service tax is applicable or not for those who have booked (and registered) the flat in Sept-04 but flat completion is in June-05. If yes, then how much will be the service tax.

- by Ambika Maheshwari, Bangalore

Service tax on residential complex has come into effect from 16.06.2005 and rate is 10.2% including surcharge and is payable on gross amount charged by the builder less land cost, stamp duty and registration charges. The service tax is applicable to residential complex having more than 12 units. If the builder has not completed the construction and handed over the possession by 15.06.2005, the service tax is applicable. The builder may also avail of concession on tax up to 67% of the amount provided he has complied the conditions stipulated in notification 18/2005 dated 07.06.2005. The builder will pass on the component of the tax to the purchaser.


These are all the legal questions answered by Advocate S.Selvakumar in various magazines, in various occasion including realestate reporter monthly.


Q:- I purchased a first floor flat from a promoter. From the second floor water is leading into my bathroom. Shall I ask the promoter to rectify the defect or the second floor owner? What is the remedy? Can I file a case against the promoter?

Q:- I have immovable properties in Mumbai, Bangalore which are let-out, now I require them for my business. Please inform me, in general, the grounds for eviction of my tenants?

Q:- This query is about undivided land in apartments building. What care should be taken above the undivided land while purchasing a flat? Should we register this also while purchasing the flat? Can we construct an independent house after the flats are demolished?

Q:- I am staying in a rented apartment. As per the terms of the rental agreement, I issued 3 month's notice to the landlord. The land¬lord says he cannot refund the security deposit till he finds a new tenant. He is suggesting me to vacate the apartment. If I vacate the apartment I may not get the deposit back. If I do not vacate he will go on adjusting the rent against the deposit, which I do not want. Please suggest a way out to solve the problem.

Q:- I have entered into an agreement to sell to buy a flat.  Now the builder insists that I pay service tax, sales tax, electricity and BWSSB charges, stamp duty, registration charges corpus fund for association which will be nearly 25% more than agreed flat rate.  Whether I am liable to pay all the charges or not kindly clarify.