Applicability of service tax in cases where developers builders promoter enters into an agreement with the ultimate owner for selling a dwelling unit in a residential complex at any stage of construction or even prior who makes construction linked payment. Doubts have arisen regarding the applicability of service tax in a case where developer builderpromoter enters into an agreement with the ultimate owner for selling a dwelling unit in a residential complex at any stage of construction or even prior to that and who makes construction linked payment.
It means wef01072012 any construction of residential complex or Buildings having more than one residential units are chargeable to service tax.
Service tax applicability on construction of residential complex. 262012- Service Taxand announce that w. Whether service tax is liable under construction of complex service section 65 105 zzzh on builder promoter developer or any such person- a who gets the complex built by engaging the services of a separate contractor and b who builds the residential complex on his own by employing direct labour. Hi You are liable for Service tax Exemption is available for single residential unit otherwise than as a part of a residential complex.
Or b completion and finishing services in relation to residential complex such as glazing plastering painting. Construction services in respect of residential complex becomes taxable wef. Service tax is applicable on under construction property at the time of bookingsagreements made before the construction completes.
The CBEC has clarified that where a builder promoter or the developer engages the contractor for the construction of a residential complex then the contractor shall be liable to pay the service tax on the gross amount charged for construction services provided to the builder promoter or the developer. Many regulations of the Building Code which are com-. 16062005 the definition of Construction of Complex as per Section 65 30a of Finance Act 1994 is as below.
In another words service tax would be charged on the 25 value of such services. If the contract for construction of commercial complex is a single contract and the construction of road is not recognized as a separate activity as per the contract then the service tax would be leviable on the gross amount charged for construction including the value of construction of roads. Construction of residential industrial and commercial complex or building are being charged to.
81 The service tax on construction of commercial or industrial construction services was introduced in 2004 and that on construction of complex was introduced in 2005. The service tax provisions relating to construction services cover two types of services – a Commercial or industrial construction which is taxable wef. CONSTRUCTION OF RESIDENTIAL COMPLEX SERVICE There is lot of debate on choosing the right method of service tax for builders of residential complex.
B Definition and scope of service. 1stJuly all services with regard to Construction of a complex building civil structure etc. Certain doubts did arise wrt.
Service tax is liable to be paid by the builderdeveloper on the construction service involved in the flats to be given to the land owner at the time when the possession or right in the property of the said flats are transferred to the land owner by entering into a conveyance deed or similar instrument eg. Find the attachment containing the mega exemption notification for ypour query refer only Sl. The scope of service tax on construction activities has been enlarged with effect from 01-07-2012 because many services which were hitherto outside the tax net have become taxable with the exception of construction erection commissioning or installation of original works pertaining to low-cost houses as mentioned above.
One chooses to go by the works contract method by claiming deduction of land and material and the other chooses this service. Would enjoy abatementexemption of 75. Food clothing and shelter are the basic necessities of human life.
As a social incentive measure the Government has granted exemption from service tax in respect of services by way construction of a single residential unit if it is designed for residential purposes of one family. 10-9-2004 and b Construction of complex residential complex of more than 12 residential units which is taxable wef. I Construction of Complex means a construction of a new residential complex or a part thereof.
Is the FlatsApartments Villas is given to land owners by a real estate company then service tax is also applicable on such unit. Different views were construed in this regard. CONSTRUCTION OF RESIDENTIAL COMPLEX SERVICE A Date of Introduction.
At present two rates of abatement have been prescribed for services of construction of complex building civil structure or a part thereof- a 75 of the amount charged in case of a residential unit having carpet area of less than 2000 square feet and costing less than 1 crore and b 70 of the amount charged in case of other than a above both subject to fulfilment of certain conditions prescribed therein. One and Two Family Residential Building Code Requirements 5 PREFACE The purpose of this guide is to provide an informa-tional guide to the builder for the construction of a new one or two-family residential building garage or other accessory buildings and structures. Residential complex has been redefined by replacing twelve residential units by one residential units.
82 As regards payment made by the prospective buyersflat owners in few cases the entire consideration is paid after the residential complex has been fully developed. The Government on 20thJune 2012 introduced the abatement Notification No. – construction of complex means.
16062005 vide Notification No152005-ST dated 07062005.