01 December 2011
Dear Sir, 1) My sister has purchased a flat on 15-05-2009. It’s still under construction. Builder told us that possession will be given on 15-03-2011. she have purchased this flat for Rs.1100000/- And she made payment of Rs.1000000/- before 30-06-2010. Builder said 45% construction completed as on 30-06-2010. Builder is asking for service tax of Rs.15000/- plus interest Rs.2000/-. We don’t know whether it is correct or not. I am requesting you to please help me in this regards. 2) I have purchased a flat on 28-05-2010. It’s also under construction. 90% construction completed as on 28-05-2010. Builder told us that possession will be given on 31-08-2011. We have purchased this flat for Rs.4000000/- And we have made payment of Rs.1300000/- before 30-06-2010. And Rs.2000000/- after 01-07-2010. Builder told us that we have to pay service tax on 2700000/- @2.58%. I don’t know the provision. Please help me in this regards.
05 December 2011
079.01 / 23.08.07 Whether service tax is liable under construction of complex service [section 65(105)(zzzh)] on builder, promoter, developer or any such person,- (a) In a case where the builder, promoter, developer or any such person builds a residential complex, having more than 12 residential units, by engaging a contractor for construction of the said residential complex, the contractor in his capacity as a taxable service provider (to the builder / promoter / developer / any such person) shall be liable to pay service tax on the gross (a) who gets the complex built by engaging the services of a separate contractor, and (b) who builds the residential complex on his own by employing direct labour? amount charged for the construction services under ‗construction of complex‘ service [section 65(105)(zzzh)]. (b) If no other person is engaged for construction work and the builder / promoter / developer / any such person undertakes construction work on his own without engaging the services of any other person, then in such cases,- (i) service provider and service recipient relationship does not exist, (ii) services provided are in the nature of self-supply of services. Hence, in the absence of service provider and service recipient relationship and the services provided are in the nature of self-supply of services, the question of providing taxable service to any person by any other person does not arise. The Board vide Circular No.334/03/2010-TRU dated 22.06.2010 on Construction of Residential Complex Service has further clarified the following issues:- ―10(a). (zzzh) Construction of Complex This exemption shall not apply in cases where the taxable services provided are only completion and finishing services in relation to residential complex, referred to in sub-clause (b) of clause (30a) of section 65 of the Finance Act. Explanation.- The gross amount charged shall include the value of goods and materials supplied or provided or used for providing the taxable service by the service provider. This exemption shall not apply in cases where the cost of land has been separately recovered from the buyer by the builder or his representative. first of all you mustbe understand the transaction beetween u and ur builder,u must be demanded the service tax invoice issue by him remaining quary mail me
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