I have purchased and registration done in December 2010, for a flat in Prakruti Pearls -ghodbunder road, Thane,for which i have paid, on demand 94% of the payments without any delay.Now, the builder has sent a demand for service tax and VAT ,along with 18% interest on all the amounts paid till date. I have agreed to pay the taxes, but the builder insisits on 18% interest without which he is not ready to accept the Service tax/VAT.
Please advise, as i don't see any fault from my end, to be penalised.
Secondly, the builder has not made any demand for the said amount earlier ( for last 15 months) ,then how the penalty of 18% can be applied?
Please advise,

Thanks and Regards,