Construction of Bldg. work [Service Tax matter]
Paras Kariya
(Querist) 23 March 2010
This query is : Resolved
Dear freinds,
(1) Pls give me guidance regarding the construction of bldg. for the government, semi-government, nagarpalika, etc like residential quarters, office building, etc. are taxable or not.
(2) If there is registered with GETCO (GEB - electricity company under Government) contractor and construction of control room, office building, etc. and they have not any service tax no. and they not to claim any service tax againg the executed work. In those works, they have the tender clause, the service tax is paid by the contractor and after submission of proof of paid service tax reimbursement from the department.
But if they didnot paid to service tax department because they thoughts that that liabilities is to the department they didnot paid and claim from the department.
Pls. give the proper guidence in this regards
Thanks
With regards
Paras H. Kariya
Law student
Junagadh
s.subramanian
(Expert) 03 November 2010
You have to pay service tax and claim reimbursement from department.
R.Ramachandran
(Expert) 03 November 2010
Currently the construction activities are covered under three taxable services viz., (1) Commercial or industrial construction; (2) Constrution of Complex Service and (3) Works Contract Service.
If the construction is not to be used for commercial or industrial purposes - whoever may be the service receiver - whether it is government or private - there will be no service tax on the same.
If the Complex does not have more than 12 residential units it will not fall under Construction of Complex Service.
Assuming that the Complex is havingmore than 12 residential units, but is not meant for any commercial purpose - say sale etc., but for use by employees of the organization etc., then also the service tax would not get attracted.
The definition of works contract has borrowed the definition of 'Commercial or industrial construction' and 'Construction of Complex Service'is leviable. As such, so long as the services do not relate to any of the above two services, the said service would not even fall under 'Works Contract Service'.
Based on the above clarification, you may apply to your fact situation and arrive at a conclusion.
