whether service tax on the services acquired for commercial construction(inputs for commercial construction) is payable when the commercial service is exempt?
4 Replies
Devendra
(Chartered Accountant)
(4775 Points)
Replied 06 November 2010
No service Tax liability in the hands of the assessee.
CA Rupesh Agrawal
(Chartered Accountant)
(854 Points)
Replied 06 November 2010
Service tax will be leviable as construction contract is a taxable service. It makes no difference that the services provided from that commercial establishment/ costruction is exempt. However 75% abatement is available if the contract is material cum service. So effective service tax rate will be 10.3 * 25% i.e. 2.575%
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 08 November 2010
The exemption from ST for the output service does not affect the taxability of the input services. They would contineu to be taxable or exempt if any notifcation applicable. Therefore even for road contracts the telephone, insurance, manpower supply etc input services would be liable.
ranjan sahai
(general manager)
(22 Points)
Replied 11 November 2010
I would like to know whether service tax be levied in case of a proprietorship concern in construction business, doing construction of building for a hotel under an agreement.
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