Maharashtra Chamber of Housing Industry (MCHI), the apex body of developers in Maharashtra, was planning to file a writ petition in the Bombay High Court against levying of service tax on properties under construction, in the next two weeks, a top MCHI official said.
Last week, the Central Board of Excise and Customs had notified that a service tax of 10 per cent would be levied on the gross value of a housing property under construction from July 1, as it was announced in the Budget.
With the abatement on 75 per cent of the value of the property, the tax would be levied on the 25 per cent of the property price.
Property developers have already ruled out any sharing of tax burden, saying buyers would need to bear it.
“We are not service providers. We simply sell the product and, hence, service tax should not be levied on us. It will be very harsh on buyers and, so, the government should withdraw it,” said MCHI President Sunil Mantri.
Mantri said the body had filed a petition in 2008 when the Union government had introduced service tax on properties. “We may file a fresh petition this time,” he added.
