Builders bat for home buyers

A builders body said it may sue the govt over a tax that made homes more expensive...

The Maharashtra Chamber of Housing Industry (MCHI) said it was considering filing a writ petition in Court,challenging the State Government’s decision to levy service tax on properties under construction.

“The sale of a unit in a complex as per the settled law of transfer of property is not a service. Thus,sale by a builder should not be treated as service. Since service tax is levied on the property,this would be a tax on transfer of immovable property only,” MCHI’s President,Sunil Mantri,said in a press release issued here.

He said such a levy of tax would increase the cost of flats. “The buyers will have to bear the burden due to this taxation,” he said.

“The Union Government has clarified a deal is executed only when the construction is completed and full payment of the agreed sum is made. And only then the ownership of the property gets transferred to the buyer. Thus,any service provided by such seller in connection with the construction of residential complex till the execution of the deal,would be in the nature of self service and consequently not attract service tax,” he said.