Home buyers have something to look forward to in an otherwise dull property market. The customs, excise and service tax appellate tribunal recently held that they will no longer have to pay service tax on the one-time maintenance charge (deposit) paid to builders at the time of booking a flat.
“The impact of indirect taxes on home buyers is very high. So, this order will, to an extent, help buyers save 12.36% (service tax) on the amount of the deposit paid,” said Sagar Shah, head (indirect taxes), BDO India.
The one-time maintenance charge includes a flat owner’s share in the common electricity bill, lobby and water charges in a housing complex . The charge varies according to the project, amenities, use of property (whether for commercial or residential purpose), the city as well as the location and other such factors.
Buyers won’t have to pay 12.36% service tax on one-time maintenance fee paid to builders. Developers have to keep records and refund the balance once housing society is formed.