‘Can’t levy service tax if not part of agreement’

A home buyer had approached TNRERA over delay in completing his property

The Tamil Nadu Real Estate Regulatory Authority (TNRERA) has ruled that builders cannot levy service tax on home buyers, if there is no such provision in the construction-cum-sale agreement.

The ruling was given on a complaint from Venkatakrishnan Ramaswamy who had booked villa in the project “Dhakshin City/Avenue Phase-IV” developed by Green Avenue Homes and Gardens at Unamancherry village in Kancheepuram district.

The construction agreement was signed in January 2013 and the construction activity commenced in October that year. However, there is delay in completion of the villa and the common facilities.

In his response, the builder said that the project could not be completed due to delay in some payments by the buyer and service tax.

The developer claimed that the buyer had agreed to pay the service tax for the villa, but did not pay the same.

As a result, he faced problems from the Income Tax authorities for non-payment of service tax and his bank accounts were frozen.

The developer said it could not provide the amenities promised in the Phase I to V of the project.

TNRERA said there was no reference to service tax in the sale-cum-construction agreement in respect of the buyer, expect for the mention in the allotment letter.

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Printable version | Jul 5, 2020 10:43:29 PM |

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