17 December 2008
sir iam having a construction company in karnataka . i have an own land and i have started construction on my own with out giving any contracts.we have constructed more than 12 units.weather any service tax is applicable.and also i heard that builders have different categories to pay the service tax can you give me brief about the following im waiting for your valuable suggestion
17 December 2008
For the stated reasons you are a builder/promoter and on such service there is no ST. You should not enter into construction agreement with your buyers and registration has to be done for the entire cost of the flat by paying stamp duty (state levy) and NOT on the UDS portion. In my opinion, in order to save state levy (Stamp duty + regn charges) if you enter into a construction agreement means you become a contractor and ST is payable by you.
19 December 2008
In case if your have enetered into an agreement with the buyers during the construction then you may be liable to service tax under construction of residential complexes. There is a new Service introduced with effect from 01.06.2007 as works contract service under which you can apply for composition scheme and can pay the tax at 4.12% on total receipts. If you are under regular scheme then tax at 12.36% has to be paid on taxable service amount.The liability will depend upon when you have eneterd into an agreement with the buyers.
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