Dear Experts,
I have entered into a sale agreement with my builder/developer in March,2015 intending to purchase an undercontruction flat(470 Sq.ft.Super Built-up area) in a residential complex consisting of 9 flats/units.In the sale agreement it was mentioned that the total consideration amount doesn't include service tax and service tax will be payable if applicable.My consultant has provided me the following supporting details which says service tax is not appicable due to the following reason.
Dear Experts,
Requesting you to confirm on following:
Service tax provisions relating to construction cover three types of services –
i. Commercial or industrial construction which is taxable w.e.f 10-9-2004.
ii. Construction of complex (residential complex of more than 12 residential units) which is taxable w.e.f. 16-6-2005.*
iii. If sales tax/VAT/works contract tax is payable on these construction activities, related services get covered under ‘works contract service’ w.e.f. 1-6-2007 and not under first two categories of services
*Construction of Residential Complex Service Came Into effect 16th June,2005 wherein "Residential Complex" means any complex comprising of a building or building having more than 12 residential units
Notification No. 9/2016-Service Tax, Dated: March 01, 2016 also says low cost houses up to a carpet area of 60 square metres per house in a housing project approved by the competent authority.
CBE&C, has also clarified as follows – (Annexure- A to JS (TRU-II) D.O. letter F. No.334/1/2010-TRU dated 26-2-2010) Covered car parking place / parking place has been specifically excluded from the service tax "Preferential Location" services. They are not chargeable to tax.
Service tax is payable on receipt basis and hence as builder/developer gets payment for construction service from their customer, they have to pay service tax on that amount. If service tax is not shown separately in bill or amount received, the amount received should be taken as inclusive of service tax and then back calculation may be made.
Regards,
Ani..
