Have you heard about Service Tax? Service tax is levied on the services provided by a business. Similarly, Service Tax On Property has to be paid on the property as well. Property owners have to take care of many things while buying a house. Firstly, there is always a confusion regarding whether service tax is payable on property. Today we will tell you when this tax has to be paid on the property.

When a buyer purchases a property, the ownership is transferred to that person and the seller becomes the service provider of the property on which service tax is payable. However, the same has to be paid before the Competent Authority issues the completion certificate.

What is service tax and when it is levied.

There are two types of property, ready to move and under construction. In the real estate sector, service tax is levied only on under-construction properties. It is charged on any property, building complex or civil structure offered for sale. Service tax is levied on under-construction property by the builder or real estate developer at the time the building complex, civil structure or parts are offered for sale.

No tax to be paid on ready

to move In ready to move in property mainly there is no need to pay any service tax. The reason for this is that the property developer is selling such a property which is completely built. It is not providing any service to the buyer of the property. Property transactions attract high taxes and provide many opportunities to taxpayers to save tax. Hence, it is advised to take tax related advice from a professional before buying/selling any property.

Exemption is available in these cases

The rate of service tax on property is 3.75 per cent or 4.5 per cent, depending on the size of the property and the value of the transaction. Service tax is exempted on the sale of a single owner stand alone residential building. Apart from this, low-cost houses whose carpet area is up to 60 square meters. In this, the housing project should be approved by the competent authority under the scheme of Affordable Housing made by the Ministry of Housing, Government of India.

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GSTN has said that from May 1, it will be necessary to upload the receipt of any transaction on the Invoice Registration Portal (IRP) within 7 days. Changes have been made in the rules for timely compliance of GST compliance.

According to GSTN, it will be necessary for all businessmen with a turnover of more than 100 crores to follow this rule from May 1. Under the new rule, businesses with a turnover of more than 100 crores will not be able to upload invoices older than 7 days. This means that the receipt of transactions older than 7 days will not be able to be uploaded on GSTN and returns cannot be claimed on it. However, this rule is only for invoices. Businessmen will be able to upload debit and credit notes even after 7 days.

Big loss to traders

GST rules say that if an invoice is not uploaded on IRP, then traders will not be able to take advantage of Input Tax Credit (ITC) on it. ITC is claimed to get back the difference between the raw material and the final product of a product. At present, companies can upload their e-invoices anytime, but they will have only 7 days after the new rule comes into force.

Experts say that the new rule will be helpful in increasing the GST collection . Along with this, companies will also get the benefit of ITC on time. Its purpose is to strengthen the process of digitization. Recently, the government had also made it mandatory for businesses or companies with a turnover of more than 100 crores to generate a GST invoice for every transaction.

Will be implemented for everyone in future

Experts say that this process is being implemented slowly and soon it will be made mandatory for all businessmen. At present, it has been made mandatory for traders with turnover of more than 10 crores to generate electronic invoices for all B2B transactions. The government had implemented this rule from October 1, 2022. Now both government and business will be benefited by timely uploading of e-invoices on IRP. On the one hand, it will help in increasing the GST collection and on the other hand, traders will be able to get the benefit of ITC soon.

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