Service Tax Construction

This query is : Resolved

Rajiv sharma (Querist)
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08 February 2011 Hi,

If a builder constructs flats to be sold on its own ( that is land is also owned by the builder). The complex he constructs contains both commercial and residential flats.

So under what service should he register

- Sec 65 {30}construction of complex
- Sec 65 {90a) residential complex

Regards, Rajiv Sharma
(r_raajiv@rediffmail.com)

Rajesh Kumar

Rajesh Kumar (Expert)
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08 February 2011 To the buyers he is selling residential flats, service tax shall be charged and paid under construction of residential complex service.
With respect of Commercial construction, it appears to be in the nature of self service and no Service tax is payable.

Rajiv sharma

Rajiv sharma (Querist)
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08 February 2011 Dear Rajeshji,

Thanks for your reply.

By commercial flats i mean the builder ( Pvt Ltd Company in this case)will be constructing shops.... still Service Tax will not be leviable on commercial portion.

Is it not commercial construction taxable.

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Rahul Singhal

Rahul Singhal (Expert)
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08 February 2011 Dear rajiv
In my opinion, as per service tax Rules , if the Construction site contains 12 residential units ,then it is covered under the definition of the residential complex....other wise you can register here as construction of complex.......Service tax is levied on both the cases....thats is in case of Residential flats as well as for commercial shops also

In case of Any Query Do mail me on my mail id which is rahulajaysinghal@gmail.com

Aditya Maheshwari

Aditya Maheshwari (Expert)
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08 February 2011 You have to register under both services.

Rajesh Kumar

Rajesh Kumar (Expert)
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08 February 2011 @Rajeev
There is slight difference in case of residential complex, and commercial construction.
In case of residential complex, construction of residential complex itself is a service. It follows from deeming provision in the Act itself.
In case of commercial construction, you have to provide this service to some other person. As the builder is constructing the shop for itself, and selling the shop after construction, such construction is in the nature of self-service and no service tax is payable. In that case, CBEC Circular 108/2009 is still applicable.