Service tax

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Krishan (Querist)
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31 January 2011 I have purchased one Residential flat in Nov 2010 in Pune , for which I came to know that the Builder has already completed 60 % of this project before 1st July 2010 ,

So Could you please confirm me if I can claim benefit of this Partial Completion and I need to pay Service tax only on the balance 40%.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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31 January 2011 This depends on the agreement. Many possible alterantives exist.
If one were to enter into an agreement where the cost of land as well as the built portion is by way of agreement to sell and for the balacne a construction agreement is entered into, the liability would be on the value of construction under works contract services.

Krishan

Krishan (Querist)
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31 January 2011 Hi Madhukar,

Thanks for your response and Valuable Time

I have already entered into one single contract after 1st July with the builder for sale of Property which include both Land and construction price.

so can you please confirm if i can still have this benefit of Partial completion .

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Krishan

Krishan (Querist)
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31 January 2011 can i claim benefit on the basis of circular No. 62/11/2003-ST dated 21-8-2003 (2 It is a basic principle that no tax can be charged except under authority of law. Thus, if the levy of service tax on a particular service comes into force on a given date, that service will not be taxable if rendered before that date. The levy of service tax on “Maintenance or repair service” has come into force on 1-7-2003. Accordingly any maintenance or repair service rendered prior to 1-7-2003 will not be taxable, irrespective of when the bills are raised or payment made. This will apply to other services as well which were rendered prior to the imposition of service tax on them)

and also on the basis of , Second Proviso to Rule 6 (1) ,Mentioned no service tax is payable for the part or whole of the value of the services attributable to the services provided during the period when such services were not taxable.