SERVICE TAX ON BUILDERS/CONTRACTORS

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 December 2010 Charminar Owners’ Association is formed to construct 20 bunglows for
members with internal roads, street lights, drainage, recreation club etc. It has appointed Charminar Builders to construct the bunglows with necessary facilities for a lump sum consideration. It is intended that after construction, the property will be conveyed to
the members of the association.

Q1. Please inform about the liability of Builders under Service Tax as construction service provider.

Q2. what will be the case if Charminar Owners’ Association transfer
the plot to the members before
development and the members' enter into a construction agreement with Charminar Builders.

Q3. Will there be any service tax liability for Charminar Owners' Association in Case No. 1 if it receives the amount from the members inclusive of the cost of Plot and construction (The cost of Plot and construction price can be bifurcated. The construction agreement between the association and builders is on a no profit/no loss basis).

Please reply fast? It's urgent. I WOULD BE EXTREMELY THANKFUL FOR YOUR KIND RESPONSE.

THANKS IN ADVANCE.

Guest

Guest (Expert)

03 December 2010 This is a taxable activity chargeable under 'Construction of commercial complex service'or 'works contract service' depending on the scope of service.
please seek advise of a tax practitioner to optimise tax.