Service tax on work contract

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 February 2012 Dear sir,
Plz advice me in the below mention case

A developer/promoter undertakes two plots of land and constructs residential complex under following conditions of:-

•The complex consists of 15/12 units
•The promoter/ developer constructs the complex of his own resources
•He is not appointing any contractor
•Before getting Certificate of Completion he is taking advance money for booking the flat.
•He is providing lift and other extra facilities
•He is taking advance money with an agreement to provide the flat after paying full amount.
•Sale Deed is prepared after full payment.
•The agreement with the landlord and the developer is on 50/50 basis

One of the persons who is booking the flat for Rs 12, 00,000/- and pays Rs 300000/- , 500000/- and 200000/- in advance in different intervals.

Plz advice what should I do in regard to works contract and service tax if the above complex is furnished and unfurnished.
Plz. advice the rate of tax and way of calculation

Regards

Samsad

Krishna Mohan

Krishna Mohan (Expert)
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23 February 2012 The construction of residential buildings which attracts VAT falls under Works Contract Service. Hence, construction of 12 flats or more flats does not make any difference in this case. Collection and payment of ST has to be done on accrual basis or receipt basis whichever is earlier. In this case, your have to collect ST as and when part payment being received by the builder towards advance. For receipt of Rs.3 lacs advance, he has to collect ST @ 4.12% on Rs. 3 lacs (assuming builder opts for composition scheme).