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Hi Friends,

I have constructed a house of around 20sq and my contractor is charging 1.35 lks as service tax.Can you pls share your thoughts on what is this service tax.This note was there in our agreement that 'service charge will be charged extra'.If this is genuine then what is the percentage amount on what.Kindly help.

If your contractor is giving you a bill which has Tin no for service charge then its genuine, else you know what it is.
However no contractor charges service charge, unless some genuine consultation services was availed from him.

Thanks
Vijay Thapa

Thanks for your reply Vijay

Dear New home,

Ensure that the contractor has given you proper bill /running bill with his 15 digit PAN based service tax number. In few instances contractors' collect this and might not remit the tax. Ideally it should be 12.36% on 25% of contract value ( service portion). On the remaining 75% he should collect VAT. You may check with him as to how he has charged the tax.

Hope this helps