vat & sales tax for contractor/Engineer

[kraghum]

Dear all

My contractor (Item Rate) is asking that i need to pay VAT and Service Tax on some portion of construction, has any body have any experience. eg he asking me to pay VAT for at least for amount of 25 Lakhs which is 50% of the cost..

Please advise, for Independent House without any rental units (only for one family, do i still need to pay VAT?

Regards
Raghu