Mumbai: The Maharashtra Chamber of Housing
Industry (MCHI) today 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.