Service Tax on Builders

This query is : Resolved 

27 August 2009 Is Service Tax applicable on builders / developers constructing building for commercial use, as the service tax circular regarding service tax on builders only specifies residential complex..

28 August 2009 Dear Sharma,

The Builder is executing works contract of building a new civil structure for commercial purposes. Hence he is liable to pay VAT for the transfer of materials. Thus the builder is satisfying both the conditions for WORKS CONTRACTS SERVICES.

Such construction activity is taxable under the cateogry WORKS CONTRACTS SERVICES.

Thanks.

Sarathy



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