MCHI challenges constitutional validity of the Finance Act 2010 Service Tax

By Pallavii Pitale 

Maharashtra Chamber of Housing Industry through their Writ Petition have challenged the constitutional validity of the Finance Act 2010.

In a press conference,  President Mr. Sunil Mantri said that the government is trying to impose various taxes which is finally leading to the increase in the prices of the real estate stock. Finally the end user, the owner of the premises has to bare maximum of all these taxes and other duties. About 20-25% of the total value of the premises, are the taxes which are to be paid to the government.

Similar to selling of goods,  selling of a flat or a premises is also an activity of selling and not a service so the government cannot charge service tax on the sale of any premises. MCHI has taken a proactive stand that the service tax must be removed.

The organization is strictly of the opinion that the high rise committee should be abolished with immediate effect.  In cities like Mumbai, where there is hardly any availability of open plots for development, redevelopment of existing structures have no other option but to go higher in order to meet the ever increasing demand for houses.

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2 thoughts on “MCHI challenges constitutional validity of the Finance Act 2010 Service Tax

  1. Thanks for the superb efforts of MCHI for obtaining stay. But, what is the progress of this decision? Whether the Court has decided the matter? I note from TV ads, the Govt is saying that service tax is to be levied on construction services and the tax payers should pay the same. Please reply.

  2. This is great news indeed. Since it is now clear that the High courts have issued a stay order on the Service tax then why are developers insisting we deposit the service tax due into their escrow accounts.

    Even issuing us with letters stating:
    “Failure do comply rendering us liable to heavy fines and or threats of failure to pay amounts herein shall constitute a event of default under the Application /Agreement” -is this legal . Can someone please shed some light on this ?

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