Service tax for real estate
This query is : Resolved
14 August 2012
Hello experts
A real estate company is charging amount in parts as follows
1. Basic Sale price
2. PLC
3. Open Car parking
4. Covered car parking
5. EDC
6. IDC
7. Club Building Fund
8. Interest on late payment
9. One time power back up charges
Qurey is
Service tax is applicable on which
Part and rate of service tax
Is there any exempt part out of all .
Thanks in advance '
Ritesh Khruana
A real estate company is charging amount in parts as follows
1. Basic Sale price
2. PLC
3. Open Car parking
4. Covered car parking
5. EDC
6. IDC
7. Club Building Fund
8. Interest on late payment
9. One time power back up charges
Qurey is
Service tax is applicable on which
Part and rate of service tax
Is there any exempt part out of all .
Thanks in advance '
Ritesh Khruana
14 August 2012
W.e.f 01.07.2012 follwing is the position:
1. Basic Ssale Price is Main COnsideration
Other Charges recovered in my opinion in Point No. 2, 3, 4 7, 9 shall be bundled in the ordinary course of business. Therefore, the service tax rate applicable on above referred points and Basic Sale Price shall be 3.09% (75 % abatement).
As regards, 5 & 6 if these charges are payable to the statutory authority and being recovered from buyers on actual basis, then no tax. But if such charges are not payable to any statutory authority then these shall also be taxabel at 3.09%
No service tax on Point No. 8 as specifically excluded under Valuation Rules, 2006
It may noted that before July 2012 tax rate on PLC was 10.30%/12.36% and therefore, it may subject to objection/litigation from Department initially if now we will pay tax at 3.09%.
1. Basic Ssale Price is Main COnsideration
Other Charges recovered in my opinion in Point No. 2, 3, 4 7, 9 shall be bundled in the ordinary course of business. Therefore, the service tax rate applicable on above referred points and Basic Sale Price shall be 3.09% (75 % abatement).
As regards, 5 & 6 if these charges are payable to the statutory authority and being recovered from buyers on actual basis, then no tax. But if such charges are not payable to any statutory authority then these shall also be taxabel at 3.09%
No service tax on Point No. 8 as specifically excluded under Valuation Rules, 2006
It may noted that before July 2012 tax rate on PLC was 10.30%/12.36% and therefore, it may subject to objection/litigation from Department initially if now we will pay tax at 3.09%.
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14 August 2012
As per the abatement notn 26/2012, where the entire consideration is received after issuance of completion certificate by the competent authority, service tax @12.36% is payable only on 25% (when the value of land is included in the amount charged).
Therefore i agree with CA Nikhil. Yes, Point no.8 is excluded for valuation.
Therefore i agree with CA Nikhil. Yes, Point no.8 is excluded for valuation.
14 August 2012
thanks Nikhil and Rengraj R. K.
One more query
if construction company also provide service of laying of gas pipe line to all flats
any charges recovered for this also covered in construction service or not.
also clear me the current rate of service tax on PLC.
One more query
if construction company also provide service of laying of gas pipe line to all flats
any charges recovered for this also covered in construction service or not.
also clear me the current rate of service tax on PLC.
16 August 2012
I have a different opinion the notification 26/2012 says where entire consideration is not received after the issuance of completion certificate
The relevant portion is reproduced as under :-
"Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority "
The sale of property on receipt of full consideration after the completion of construction (and so certified by the competent authority) become a transfer of property which is out of the purview of Service Tax Law
The relevant portion is reproduced as under :-
"Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority "
The sale of property on receipt of full consideration after the completion of construction (and so certified by the competent authority) become a transfer of property which is out of the purview of Service Tax Law
16 August 2012
Hello Experts
Kindly tell
what is present rate of service tax on PLC
and
if Construction company provide service of laying of gas pipe line to all flat holder and charge money for it
is it incidental to construction service or separate service
Kindly tell
what is present rate of service tax on PLC
and
if Construction company provide service of laying of gas pipe line to all flat holder and charge money for it
is it incidental to construction service or separate service
16 August 2012
Present Rate of ST on PLC (Upto 30.06.2012) is 12.36%
In case of laying of pipeline in my opinion, if the charges are recovered or will be recovered on regular basis then it shall be treated as separate service. If one time charges are recovered then it can be bundled into Construction Service.
In case of laying of pipeline in my opinion, if the charges are recovered or will be recovered on regular basis then it shall be treated as separate service. If one time charges are recovered then it can be bundled into Construction Service.
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16 August 2012
Dear CA Nikhil Jhanwar
Thanks for your reply
please let me know Rate of PLC on or after 1.07.2012 or any notification with reference to this.
Thanks and regards
Ritesh khurana
Dear CA Nikhil Jhanwar
Thanks for your reply
please let me know Rate of PLC on or after 1.07.2012 or any notification with reference to this.
Thanks and regards
Ritesh khurana
16 August 2012
Dear Ritesh
On or after 01.07.2012 Service tax is based on negative list where everything is taxable except which are negated or exempted. In that case there is no separate notification or rule for rate of PLC. Notification for abatement talks of only Construction Service.
Although for provisions of bundling You can refer Education Guide.
On or after 01.07.2012 Service tax is based on negative list where everything is taxable except which are negated or exempted. In that case there is no separate notification or rule for rate of PLC. Notification for abatement talks of only Construction Service.
Although for provisions of bundling You can refer Education Guide.
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