property service tax

In case of flat sales, the title transfer of immovable property with an issuance of an occupancy certificate will be exempted from any kind of service tax, on Monday the finance ministry stated.

It was long time issue in the real estate domain and to resolve this long standing issue which is directly related to the essentially of service tax on the time of sale of dwellings or flats after issuing the occupancy certificate and before issuing completion certificate. It is well known fact that these kinds of sales need consideration after the issue of occupancy certificate. According to official press release, “The definition of service under Section 65B (44) of the Finance Act, 1994, leading towards the issue of transfer of title in immovable property is not taxable”.

However; the clarification given by CBEC (Central Board of Excise and Customs) all the cases related to these areas are under the jurisdiction of BMC (Brihanmumbai Municipal Corporation) or MCGM (Municipal Corporation of Greater Mumbai).

service tax

When it comes to sale of flats or transfer of title of immovable property, so now onwards after the issuance of occupancy certificate there will be no need to pay the service tax, as per latest guidelines of Finance Ministry of India. On Monday, CBEC (The Central Board of Excise and Customs) issued the clarification and statement for the related cases which are pending in these areas and are under the jurisdiction or BMC (Brihanmumbai Municipal Corporation) or MCGM (Municipal Corporation of Greater Mumbai).

On October 23, 2015, it has been conveyed to the Service Tax Authorities in Mumbai that all the dwellings or flats or apartments, or more, in which the entire consideration is received after the issue of occupancy certificate by BMC; will fall outside the definition of “Service” which comes under the Finance Act, 1994 and it means there will be no more tax for title transfer of immovable property, as per the statement of the Central Board of Excise and Customs (CBEC).

The concerning board in the Finance Ministry stated that all the clarification was issued to resolve the long time standing issue which is directly related to the levy of service tax on sale of dwellings or flats or apartments and more after the issue of occupancy certificate and before issue of completion certificate in the jurisdiction or BMC (Brihanmumbai Municipal Corporation) or MCGM (Municipal Corporation of Greater Mumbai).

Currently, service tax is levied at 14 %, but when it comes to housing projects so it is at the abatement of 75 % which means levied on the 25 per cent of the total cost.