Service Tax on Builders (URGENT)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2010 Dear Seniors,

I have an urgent query regarding new circulars made applicable service tax on builders refer to Notification No. 29/2010 dtd. 22.06.2.1. applicable from 01st july, 2010

Detailed description can be view as per below stated link:
http://www.servicetax.gov.in/notifications/notfns-2k10/st-tru2k10/st29-2k10.htm

Question No.1:-
Will service tax be applicable on the payments received after 01st july, 2010 while we sent the demand letter before july, 2010 for the work completed?
Question No.2:-
Will service tax be applicable on the payments received after 01st july, 2010 while we sent the demand letter before july, 2010 for the work not completed?

Kindly treat it most urgent.

Thanks in advance.

Pradeep Jain

Pradeep Jain (Expert)
Follow

11 September 2010 If the amount is received in advance then the aforesaid notification is applicable. But the fundamental rule of service tax is that the liablity to pay service tax is linked with service provided. It is neither linked with billed amount nor with receipt amount. So, if the service is provided before date of imposition of tax then the service tax is not payable. But if the service is provided after that date even though the bill is raised before that date then the service tax has to be paid on the same.