Abatement of service tax on commercial property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 October 2013 as per notification after 01/03/2013 abatement on commercial property is 70%, i.e we have to pay service tax on 30% of agreement value on commercial property.

if a customer booked a shop on 25/02/2013 and paid rs. 5,00,000/- for booking of shop. the total value of shop is rs. 12,00,000/-. remaining 7,00,000/- he has paid after 01/03/2013

my query is whether 70% abatement is to be taken or 75% abatement is to be calculated on rs. 7,00,000/- which customer has paid after 01/03/13

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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25 October 2013 In Construction industry usually tax invoice is not issued and only a demand letter is sent. Therefore ST is payable on receipt basis under the Point of Taxation Rules. Accordingly at the time of payment of Rs.700,000 the rate of abatement was 70% and that is all that will be available to the purchaser since the construction contractor can avail only of 70% abatement.